Trust 11 - Trustee powers & Duties Advancement Flashcards
What is the duty to distribute?
must pay as soon as possible
Who can trustees pay income to early
- Minors
- no prior interest
- Not adults (have duty to pay income to suits anyway)
Cannot be made where there is a prior interest (so where there is a life tenant with the child reminder, the trustees can’t pay maintenance out of income for the child because it belongs to the life tenant)
Who can trustees pay capital to early
- Minors
- Adults
Can be made if there is a prior interest, but the trustees will need that person’s written consent
Where there is a contingent subsequent interest (i.e. trust holds for A until 21 and if not for B), do the trustees need permission from B before making the payment?
No, B has a subsequent interest. Consent is only required for a prior interest.
If requested, do trustees HAVE to make an advancement?
No. They MAY make an advancement.
What is the power of maintenance s.31 Minor
Power to pay income
- Where a minor has a vested (or contingent) interest in trust, trustees can pay income as they think fit
- Must be used for primary benefit of minor
- does not apply if someone else has prior rights to income (successive interest trust)
What is the power of advancement s.32 anyone
Power to pay capital
- A B who expects to receive capital from trust in future may wish to receive capital before it vests in possession
- adult and minor B,
- vested or contingent interests
- pay up to 100%
- pay out where prior interest if of age, not mental.
- immediate financial benefit, ensuring money is used for purposes it was provided for
How much advancement can be made?
100% of capital
Do trustees need to check what the B is actually spending the money on?
Yes, or else breach of duty
Do adult beneficiaries have the right to income as it arises?
Usually yes
Should the trustees make payment directly to the minor?
No, they cannot give good receipt
Does the ability to pay maintenance to a child out of income apply to accumulated income?
Yes
How much advancement can be made if trust set up before 1 October 2014
50%
