Trustees Powers: Maintenance And Advancement Flashcards
What do express powers in the declaration of trust allow the trustee to do?
Ahhows trustee to pay income or capital to beneficiaries before they become entitled to trust property.
In the absence, TA must be followed.
What powers do the beneficiaries have for income for minor beneficiaries?
Income is a return paid on a regular basis (dividends, interest, rent).
Trustees have the power to use income to pay for maintenance, education and benefit of a beneficiary who is under teh age of 18, so long as conditions are met:
- no contrary provision in declaration of trust
- Trsutees can only exercise this if the minor has some kind of interest in income (vested or contingent)
When can the trustee NOT use s 31 (advance of income to minor for maintenance, education)
Cannot when there is another life tenant. Must have prior interest, therefore must be respected.
Who does the trustees give the income advancement for maintenance and education to?
If trustees wish to apply income for minor beneficiary, trustee should not pay income directly to beneficiary. They should pay income direct to parent or directly to the provider of the maintenance/education.
What is the duty that trustees have to pay income to certain beneficiaries?
For adult beneficiaries, they are entitled to trust income as it arises, and trustees MUST pay this income to them, pending the besting of their beneficial interests.
If adult contingent beneficiary does before condition is satisfied, their estate receives nothing, and no one else will ave te right to reclaim any income.
What power does the trustees have to pay capital to or for beneficiaries?
Trustees have the power to pay or apply trust capital early for a beneficiary’s advancement or benefit, so long as conditions are met.
What conditions must be met for the trustee to pay a beneficiary capital for their advancement?
No contrary provision in declaration
Beneficiary has INTErEST in capital (vested interest in trust capital, or continent)
Payment must be for beneficiary’s advancement or benefit
Trusts after 2014, advancement must not exceed beneficiary entitlement. Before than, only half.
Payment is taken into account once the beneficiary receives trust capital
If beneficiary with PRIOR INTEREST, they must give WRITTEN CONSENT.
What is the max payment that a beneficiary can recieve in advancement of capital?
If trust was made before 2014, then only half of what they were in entitled to.
If made after 2014, then the whole.
