Beneficial Entitlement Flashcards
What are Saunders v Vautier rights?
If the beneficiary:
1. has an absolute entitlement to te property
2. Is 18 years or over
3. is of sound mind
The beneficiary can demand the trustees to transfer the legal title to them, meaning they have absolute ownership and collapse the trust
If B has a contingent gift over interest can SvV right be exercised?
No - the right cannot be exercised if there is a contingent gift over
Even if the trust deed or will states B can only inherit the trust assets when they are 25 can B exercise Saunders v Vautier rights?
yes when they are 18, provided there is no potential gift over beneficiary if they don’t reach 25
Can two or more Bs exercise this right?
Yes, provided they are all absolutely entitled, 18 or over and of sound mind
This includes a life tenant and remainderman
When can B with contingent interest not exercise SvV rights?
A contingency that is a gift over can defeat absolutely entitlement as someone else is potentially entitled. In this case, B cannot exercise SvV rights
What must there be for SvV rights to be exericsed?
Absolute entitlement
Can Saunders v Vautier rights be exercised for a discretionary trust?
If the discretionary trust is for a small group of ascertainable beneficiaries and all have been selected by the trustee, they can collapse the trust
If the group is wider, SvV rights are unlikely to be exercised as all would need to agree
What happens after Saunders v Vautier rights are exercised?
The beneficiaries become legal owners and they can distribute the property how they wish (does not have to be under the terms of the trust)
- distribute trust property how they choose
When trustees are considering using their powers of advancement, what should they consider?
Whether the advancement is pursued for the specific purpose - need to pay out the money with proper care for specific purpose
