6.2 Beneficial Entitlement

Question 1

What is a life tenant?

Answer 1

A beneficiary in a interest in possession trust / life interest trust where they are granted an interest in the trust for their lifetime

Question 2

What is a residuary beneficiary / remainderman?

Answer 2

Interest in possession trust
Where the life tenant’s interest comes to an end (usually through their death) and the trust interest passes to the remainderman

Question 3

What is a fixed interest?

Answer 3

Beneficiaries with in a fixed interest trust hold a fixed entitlement to the capital / income of the trust

Question 4

Discretionary trusts - the interest of the beneficiaries is subject to

Answer 4

The trustees, they decide how much the beneficiaries are entitled to

Question 5

Vested interest in a trust

Answer 5

The trustee holds the asset in the trust with no further conditions

Question 6

Contingent interests in a trust

Answer 6

The trustee holds the asset in the trust with conditions e.g the beneficiary reaching a certain age

Question 7

Beneficiaries can use the rule in X to vary a trust - what is X

Answer 7

Saunders v Vautier

Question 8

What are the conditions of the rule in Saunders v Vautier

Answer 8

• sui juris
• between them, the beneficiaries must be absolutely entitled to the trust

Question 9

In what type of trust is it difficult to apply the rule in Saunders v Vautier

Answer 9

Discretionary trust. Because the potential beneficiaries may have not yet been born. Some beneficiaries may not consent to the trust being varied

Question 10

To use the rule in Saunders v Vautier the beneficiaries must ALL be

Answer 10

sui juris which means 18 years old. They cannot bring a trust to an end if they are not 18