Trust: Interests and S&V

Question 1

What are the different interests in trusts?

Answer 1

Vested
- no condition attached

Contingent
- condition attached

Limited
- does not give capital
- normally limited in time

Question 2

What happens if beneficiary has vested interest but is under 18? What if they die?

Answer 2

Held on trust till 18th birthday as minor cannot give good receipt

If they die it passes with beneficiaries estate

Question 3

What is a gift over provision in trust?

Answer 3

Provision that provides for case where contingent interest if failed

Otherwise held on constructive trust for settlor or their estate

Question 4

When does a minor have right to income from capital?

Answer 4

Must have a vested or contingent interest with no prior limited life interest

Cannot collect income as minor so added to capital

Question 5

When can sole beneficiary exercise Saunders v Vautier rights?

Answer 5

One Beneficiary
- Sole adult beneficiary of sound mind,
- with vested interest in the trust property
- is entitled to direct the trustee to transfer legal title to them

Multiple with Distinct Interest
- if can be severed without effecting other beneficiaries

May need consent of prio life interest beneficiary

Question 6

When can multiple beneficiaries exercise Saunders v Vautier Rights?

Answer 6

• all adults of sound mind
• share absolute beneficial entitlement
• can do in such shares as they choose

Consent
- discretionary trust: all beneficiaries
- contingent: of beneficiary of gift over
- successive: remainder man agrees (not if hypothetical)