Beneficial entitlement Flashcards
What two rights and interests does the beneficiary have?
- Equitable proprietary interest in the trust property
- Personal rights to enforce the Trust against the Trustee
What is a fixed Trust?
beneficiaries entitlement is fixed by the settlor (trustees have no discretion)
What is a successive interest trust?
consecutive interests giving some beneficiaries a right to income while others entitled to capital
What is a life interest trust?
beneficiary entitled to income during lifetime and other beneficiary/s entitled to capital after life tenant’s death
What is a discretionary Trust?
trustees have the discretion to distribute trust property
Which Trusts have proprietary rights?
Fixed Trusts
Who determines the potential beneficiaries in a discretionary trust?
Settlor
Do beneficiaries of a discretionary trust have an equitable interest in the trust property?
No
What rights do beneficiaries of a discretionary trust have?
Right to ensure trustees exercise powers properly
Do donees of a power of appointment have to exercise their power?
No
What is a fiduciary power of appointment?
power given to a trustee - dont need to exercise but have to periodically consider exercising
What is a personal power of appointment?
Power given to non-trustee
What is a vested interest?
Current right to property
What is an interest vested in possession?
Current right to enjoyment of property
What is an interest vested in interest?
Current right to future enjoyment of property
What is a contingent interest?
Interest conditional on the occurrence of an uncertain future event
How will a beneficiary who is an adult be entitled to receive income?
As it arises
How will a beneficiary who is a minor be entitled to receive income?
Not as it arises, but trustees may apply it for their benefit
What is the rule in saunders v vautier?
Sole adult beneficiary of sound mind, and with vested interest, is entitled to direct trustee to transfer legal title to them
How may the rule in saunders v vautier apply where there are multiple beneficiaries?
If each beneficiary has distinct interest which can be severed without impacting others, can exercise rights
