Beneficial entitlement

Question 1

What two rights and interests does the beneficiary have?

Answer 1

1. Equitable proprietary interest in the trust property
2. Personal rights to enforce the Trust against the Trustee

Question 2

What is a fixed Trust?

Answer 2

beneficiaries entitlement is fixed by the settlor (trustees have no discretion)

Question 3

What is a successive interest trust?

Answer 3

consecutive interests giving some beneficiaries a right to income while others entitled to capital

Question 4

What is a life interest trust?

Answer 4

beneficiary entitled to income during lifetime and other beneficiary/s entitled to capital after life tenant’s death

Question 5

What is a discretionary Trust?

Answer 5

trustees have the discretion to distribute trust property

Question 6

Which Trusts have proprietary rights?

Answer 6

Fixed Trusts

Question 7

Who determines the potential beneficiaries in a discretionary trust?

Answer 7

Settlor

Question 8

Do beneficiaries of a discretionary trust have an equitable interest in the trust property?

Answer 8

No

Question 9

What rights do beneficiaries of a discretionary trust have?

Answer 9

Right to ensure trustees exercise powers properly

Question 10

Do donees of a power of appointment have to exercise their power?

Answer 10

No

Question 11

What is a fiduciary power of appointment?

Answer 11

power given to a trustee - dont need to exercise but have to periodically consider exercising

Question 12

What is a personal power of appointment?

Answer 12

Power given to non-trustee

Question 13

What is a vested interest?

Answer 13

Current right to property

Question 14

What is an interest vested in possession?

Answer 14

Current right to enjoyment of property

Question 15

What is an interest vested in interest?

Answer 15

Current right to future enjoyment of property

Question 16

What is a contingent interest?

Answer 16

Interest conditional on the occurrence of an uncertain future event

Question 17

How will a beneficiary who is an adult be entitled to receive income?

Answer 17

As it arises

Question 18

How will a beneficiary who is a minor be entitled to receive income?

Answer 18

Not as it arises, but trustees may apply it for their benefit

Question 19

What is the rule in saunders v vautier?

Answer 19

Sole adult beneficiary of sound mind, and with vested interest, is entitled to direct trustee to transfer legal title to them

Question 20

How may the rule in saunders v vautier apply where there are multiple beneficiaries?

Answer 20

If each beneficiary has distinct interest which can be severed without impacting others, can exercise rights