Separate settlements: non-exhaustive trusts and revocable trusts
It may also be possible for the property to return to being held on the original trusts if the appointment is not exhaustive. This may be because the appointment only applies for a specific period, but most commonly it will be because it fails to cover every eventuality. For example it may provide for X and Y to be entitled to the income immediately, and to be entitled to the capital provided they reach the age of 35. But if both fail to reach 35, and there are no alternatives specified, the property will be held upon the trusts of the original settlement. The other common example is where the appointment is to A for life with remainders to A’s children. If A has no children currently then the appointment might fail. Therefore it is not exhaustive and there is no new settlement.