Beneficial Interests Flashcards
Vested in possession
A present right to present enjoyment.
Vested in interest
A present right to future enjoyment.
Vested interest
Conditions:
- The beneficiaries must be ascertained or ascertainable; and
- They must be ready to take possession but may be prevented from doing so due to the existence of a prior interest.
An interest will be vested even if it is a right to future enjoyment and if the beneficiary dies before it becomes vested in possession, it will pass to their estate at the relevant time.
Contingent Interest
An interest contingent on an event taking place. If the beneficiary dies before meeting the condition, the interest is lost. Usually includes a gift-over.
Perpetuity Period
Any gifts that tie up property for longer are void. The period is ‘lives in matter plus 21 years’.
Express lives in being
When settlor expressly names people that are the express lives of being.
Implied lives of being
Everyone who is alive at the date of the settlement and has been implicated in the settlement.
Fixed Trust - Rights
Beneficiary has the right to payment in accordance with the terms of the trust.
Discretionary Trust - Rights
Beneficiary has no right to payment, only the right to be considered by the trustees in the exercise of their discretion.
Bare Trust - Rights
Beneficiary has full control over the actions of the trustees in relation to the trust property.
Saunders v Vautier
A sole beneficiary who is sui juris (of full age and under no disability) and is absolutely entitled to the whole of the beneficial interest may compel the trustees to transfer the legal title to them thereby terminating the trust.
Rule extended to a group of beneficiaries but all must be of age, have no disability and be in agreement.