When can a minor beneficiary entitled to receive the income from a trust?
Once they are 18 years old
What is the presumption of advancement and when does it not apply?
Usually there is the presumption of a resulting trust if someone contributed to purchase price, but it doesn’t apply when the person providing the money is under a moral obligation to make a financial provision such as a parent-child relationship. (2 people buy property, only child name, that name holds the property for themselves and the other based on their contribution unless it’s parent-child so parent has no beneficial interest in the property.)
What happens when a Trustee puts trust funds into their own account, buys an asset and uses the full balance left in the account? What’s the basic rule?
Basic rule = T has withdrawn their own money first, if they purchase an asset and use up all the balance in their personal account, a Beneficiary can claim the asset itself or take a charge over it to recover the amount taken from the trust.
When does a half-secret trust happen? How does it fail?
When the identity of the Beneficiary is disclosed to the Trustee before the date of the will and its consistent with the communication in a will. It can fail if the will’s language refers to a future date rather than referring to a past communication that has occurred to disclose the Beneficiary to the Trustee.
When does a gift to a charity fail?
A trust is not a valid charitable trust if the objects are not exclusively charitable.
What makes a gift to charity, charitable?
A gift becomes charitable if it 1) must be for a recognized public benefit purpose (like poverty relief, education, health, or animal welfare), 2) be irrevocably transferred, 3) take effect immediately upon death (for wills), and 4) be free from conditions that could divert it from the charity, 5) ensuring it’s for the public’s benefit, not just a private individual
When can a Trustee charge for their normal professional charges?
If the will states they can charge fees or if not the sole trustee, the other Trustees consent in writing to their charges, otherwise the Trustee cannot profit from being a Trustee.
When can a Trustee advance funds to a Beneficiary?
For a Beneficiary’s advancement (purchase land as investments or residence etc.)
Provided B has an interest in the Trust
What interest does a life tenant have in a trust?
Interest in income only from the Trust, cannot be given otherwise funds
When can a Beneficiary remove a trustee by applying to court?
1) if all aged 18 years or more
2) full mental capacity
3) they all agree
4) all absolutely entitled to the trust property
What must Trustees do to not be liable to Beneficiaries for a loss in an investment?
1) consider suitability to the trust
2) consider diversification
3) obtain professional or qualified advice
4) keep reviewing the investment
5) if delegated to asset managers, provide a policy statement and review investment from time to time
6 Duties of Trustees
1) fiduciary, no conflict of interest or profit from trust
2) must exercise reasonable care and skill
3) must observe terms of the trust
4) must invest the trust fund, increase income
5) must act in B’s best interest, impartial
6) act jointly and unanimously
When is a trustee liable to the Beneficiary generally
1) if they breach their duties
2) act outside their powers
When will a court relieve a trustee of their liability?
If they acted:
1) honestly and 2) Reasonably; thus
3) ought to be excused
Are trustees liable for delegated agents defaults in managing trust property?
Not liable if 1) they used reasonable care and skill in appointments ; 2) they reviewed the agents work
What are the trustees powers?
1) delegate
2) insure trust property
3) use income for maintenance of minor Beneficiary
4) give capital early/ advancement for B’s benefit
If discretionary trust for a minor with an interest in an income from a trust, what can Trustees use that income for?
1) maintenance 2) education 3) benefit
How can Trustees use Advancement of capital in a trust?
Advancement must be for B’s benefit,
Need Life beneficiary’s written consent,
* Reduces final distribution amount
Who can receive an advance of capital from a trust to a minor?
Yes, receipt must be given by a parent or guardian for a specific purpose
Can Beneficiary end a trust?
Yes if 1) all B’s are 18 yes or older,
2) all agree
3) all have absolute entitlement on the entire trust property (not contingent on age)
4) all have mental capacity
Why would a Beneficiary end a trust?
If they want capital and the Trustees cannot or refuse to make an Advancement.
