From an initial stance of no delegation of trustee powers being permitted under any circumstances, a series of increasingly liberal judgments in the 19th century followed by the Trustee Act 1925 (TA), the Powers of Attorney Act 1971 (PAA) and the Enduring Powers of Attorney Act 1985 (EPAA) brings us to the current position, which is that the authority to delegate can be given in one of three ways: -- by the settlor in the trust instrument; -- by the beneficiaries if of full age and capacity; or -- by statute.

The statutory authority is now facing change, courtesy of the Trustee Delegation Bill (the Bill).

Section 23(1) TA A trustee may employ an agent to carry out 'any act required to be done in the execution of a trust'; the trustee is exempted from liability for the d efault of the agent if employed in good faith.

This and the other Trustee Act powers referred to below are subject to any contrary provision in the trust instrument (s.69(2) TA).

Although this represented a significant advance on the previous position, it is limited in that it extends only to ministerial acts; it does not permit trustees to delegate their powers or discretions.

The Bill makes no change to s.23(1).

Section 23(2) TA A trustee (or personal representative) may delegate to an agent or attorney his powers and discretions relating to any trust property situated outside the UK, without being liable for any loss caused by the agent.

So it is wider than s.23(1) in the powers that may be delegated, but more limited in the property it covers.

Again, the Bill makes no change to this provision.

Section 25 TA As originally enacted, s.25 enables a trustee to delegate by power of attorney all his powers and discretions while abroad for a period exceeding one month.

As amended by s.9 PAA, s.25 now enables a trustee (or personal representative) to delegate by power of attorney all his powers and discretions whether abroad or not.

Seemingly a wide power, it contains a number of safeguards for beneficiaries: a trustee cannot delegate for a period exceeding 12 months (although the power can be renewed) or to a sole co-trustee other than a trust corporation; notice must be given to co-trustees and the person empowered to appoint trustees; and the trustee remains liable for the attorney's acts.

Furthermore, it cannot be an enduring power (s.2(8) EPAA).

The Bill amends s.25, as described below.

Section 3(3) EPAA Subject to any contrary provision in the power of attorney, an attorney may exercise powers and discretions vested in the donor as trustee and give a valid receipt for capital.

The power to exercise such powers and discretions subsists after the power of attorney is registered in accordance with the EPAA.

Section 3(3) was introduced to enable a co-owner of property (who is a matter of law to a trustee) to delegate his powers and discretions in relation to the property, it having been held in Walia v Michael Naughton Ltd [1985] 3 All ER 673 that a power of attorney granted under s.10 PAA was not appropriate for a trustee, even if he had a beneficial interest in the property.

However, s.3(3) went much farther than this and extends to all trustee functions.

It contains none of the safeguards for beneficiaries previously considered essential.

For example, there is no limit on the duration of the power of attorney; notice need not be given to co-trustees; a sole co-trustee may be appointed as attorney, notwithstanding the otherwise unshakeable rule requiring two trustees to give a valid receipt.

The combination of these points, the uneasy overlap with s.25 TA, and the fact that the delegation subsists beyond the mental incapacity of the donor, has contributed to the Bill, a prominent aspect of which is to repeal s.3(3) EPAA.

Trustee Delegation Bill The main aspects of the Bill are as follows: -- It permits an attorney to carry out the trustee functions of the donor in relation to land, the capital proceeds of land or income arising from land ('relevant property') provided the power of attorney or trust instrument does not prohibit such delegation.

The donor will be liable for the attorney's acts, unless the trust instrument provides otherwise.

This is designed to help co-owners of property in that they are no longer bound by the restrictions of s.25 TA.

The new rules apply to powers of attorney granted after t he Bill is enacted.

They take effect only where the attorney is not otherwise authorised to exercise trustee functions.

A purchaser from the attorney may rely on a signed statement by the attorney that the donor has a beneficial interest in the relevant property.

-- An attorney appointed by a general power of attorney under s.10 PAA can now exercise the trustee functions of the donor in relation to relevant property (in other words, if the donor has a beneficial interest in that property).

The Bill rewrites s.25 TA for powers of attorney granted after the Bill is enacted.

The prohibition on delegating to a sole co-trustee -- other than a trust corporation -- is lifted, and a new form of power of attorney is prescribed, similar to that for non-trustee powers under s.10 PAA.

However, the requirement to give notice of the grant of the power remains, as does the 12-month limit on the duration of the power and the ability to renew the power each year, without limit.

-- Section 3(3) EPAA is repealed, subject to certain transitional provisions designed to protect existing enduring powers of attorney where the donor no not mentally capable of delegating afresh his trustee functions.

Where an enduring power of attorney was granted before the Bill is enacted, it will continue to be valid, in respect of relevant property only, even after enactment and the transitional provisions have ended.

This repeal means that trustees, who do not also have a beneficial interest in relevant property, can now only delegate their powers and discretions by complying with s.25 TA.

-- The Bill repeals s.2(8) EPAA for powers of attorney granted after the Bill is enacted s.2(8) prevented a power granted under s.25 TA from being an enduring power.

After the Act comes into force therefore, an enduring power of attorney can be used to delegate trustee functions under s.25, provided the requirements of that section are satisfied.

-- The Bill confirms and strengthens the rules that capital money must be paid to, and a valid receipt for capital money must be given by, at least two trustees, and that a conveyance or deed must be made by at least tow trustees to overreach any interest affecting a legal interest, by providing that such rules are not satisfied by money being paid to, or a receipt being given by, a single person acting both as trustee and attorney for one or more co-trustees, or as attorney for two or more trustees.

This applies to all powers of attorney, whether granted before or after enactment, except that an attorney under an enduring power of attorney granted before enactment may continue to act alone in this respect for so long as the transitional provisions replacing s.3(3) EPAA subsist.

All practitioners with clients who have a matter of course granted enduring powers of attorney covering both their functions as trustee of various trusts, and their personal functions, should alert their clients to the Bill and the implications for the trustee powers.

New powers of attorney, satisfying the requirements of the amended s.25 TA will need to drawn up, together with the requisite notices.

Annual diary notes should be made so that powers are renewed every 12 months (and new notices given on each renewal) if appropriate.