Beneficial Entitlement Flashcards
What personal rights do the objects of a trust also have?
They have the right to compel the proper administration of the trust by the trustees.
What interests / rights does a beneficiary have against a trustee?
Personal rights against a trustee
Equitable proprietary interest in the trust property
What is a successive interest trust?
A trust involving a series of consecutive interests in some trust property
What is a life interest trust?
Beneficiary gets income during lifetime, with different beneficiary becoming entitled to the capital after the income beneficiary dies.
What is a power of appointment?
A right to choose who, from within a specified class of objects, receives property.
if fiduciary - a power given to a trustee, who must periodically consider whether to exercise it.
if personal - A power of appointment given to someone who is not a trustee
What should a donor make sure happens to property subject to a power in the case that it is not exercised?
Make clear what will happen to it - considering it a ‘gift-over’ provision.
What can help judge whether something is a power of appointment or a discretionary trust?
Must - trust vs may - power
Discretion given to a third party - power of appointment, not a discretionary trust
Presence of a gift over - suggests a power.
What is the difference between a vested and a contingent interest?
Vested is a current right to property vs contingent is an interest in property conditional upon the occurrence of an uncertain future event.
Gift over is a good indicator of a contingent interest
What is the difference between an interest vested in possession and vested in interest?
VIP - A current right to current enjoyment of the property
VII - A current right to future enjoyment of the property
What happens to the intermediate income in a sole beneficiary, future interest, trust?
The capital carries the intermediate income until the interest vests in possession. Income will become accessible at the age of 18.
What is the principle in Saunders v Vautier?
A sole adult beneficiary of sound mind, with a vested interest in the trust property, is entitled to direct the trustee to transfer legal title to them and collapse the trust early, or direct the trustees to transfer legal title to a third party.
Only if absolutely entitled to the trust property.
How has the rule in S v V been extended to cases involving multiple beneficiaries?
if each beneficiary has a distinct interest in the trust property which can be severed without impacting the others - can separately exercise their S v V rights.
How does the rule in S v V operate if beneficiaries have contingent interests?
They can exercise S v V rights together with others who have a beneficial interest in the property, including objects of any gift over.
What is the clear limit on S v V rights?
beneficiaries cannot tell trustees how to administer the trust.
