Beneficial Entitlement

Question 1

Types of interests

Answer 1

Conditional v Vested
Conditional: must satify a condition before entitled to property
Vested: no conditions to entitlement

In possession v in remainder
In possession: immediate right
in remainder: right delayed

**absolute or limited **
absolute: capital
limited: interest only

Question 2

Types of fixed trusts

Answer 2

Life interest trust
Contingent interest trust

Question 3

Life Interest Trust

Answer 3

One beneficiary (known as life tenant) has a right to income during their lifetime

other Bs (known as remaindermen) have right to capital once life tenant dies.

Question 4

Contingent Interest trust

Answer 4

Right is conditional on satisfying condition

Question 5

Discretionary Trust

Answer 5

Property left to trustees who can choose who to benefit and how much to give each from a group of beneficairies.

No beneficiary has an entitlement to trust property unless Ts exercise discretion in their favour

Question 6

When can a sole B end a trust?

Answer 6

1. Adult of sound mind
2. Absolutely entitled (vested (no conditions) + in possession (immediate) + absolute (capital + interest)

Question 7

When can multiple Bs end a trust / discretionary trust?

Answer 7

If shares are severable: any B who satisfies Saunders v Vautier may take their share

If life interest or discretionary. then:
1) All Bs must be ascertainable and in existence (not possible for trust to revert to settlor)
2) All Bs must be over 18 and sound mind
3) All Bs must agree