Trustee Powers and Duties: Dispositive Powers of Maintenance and Advancement

Question 1

What are the dispositive powers that trustees have in respect of?

Answer 1

Trust capital and

Trust income

Question 2

What happens if there are no such powers stated in the TI?

Answer 2

There are statutory powers for disposition.

These are statutory power of maintenance and

Statutory power of advancement

These are ONLY DEFAULT POWERS - can be removed or ammended by TI

Question 3

What is the power of maintenance

Answer 3

Gives trustees the power to pay INCOME of the trust for the maintenance, education or benefit of a minor beneficiary.

Question 4

When does the power of maintenance apply?

Answer 4

Vested future interests and

contingent interests which carry the intermediate income.

DOES NOT APPLY WHERE ANOTHER BENEFICIARY HAS A PRIOR INTEREST IN THE INCOME - EG A SUCCESSIVE INTEREST TRUST

Question 5

What is the power of advancement?

Answer 5

power to pay CAPITAL of the trust for the advancement of a beneficiary whose interest has not yet vested in possession.

Question 6

When does the power of advancement apply?

Answer 6

Adult and minor beneficiaries

Vested future interests

Contingent interests

REQUIRES CONSENT OF ANY BENEFICIARY WITH PRIOR INTEREST