A more recent version of these Trustees' Powers, Maintenance & Advancement And Variation notes – written by Cambridge/Bpp/College Of Law students – is available here.
The following is a more accessble plain text extract of the PDF sample above, taken from our GDL Equity and Trusts Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
E&T: Trustees' Powers, Maintenance & Advancement and Variation Introduction
- Powers of trustees:
1. power of sale;
2. power to give receipts;
3. power to insure trust property - s34(1) Trustee Act 2000.
4. power to maintain minors - s31 Trustee Act 1925.
5. power to advance capital - s32 Trustee Act 1925.
6. power to delegate in certain circumstances.
- Source of power: trust document + Trustee Act 1925. Trustee Act 1925: powers implied in trusts. s31: apply income for maintenance + accumulate surplus income during minority. s32: advance capital to beneficiaries. trust instrument: can extent/restrict powers - overrules statutory provisions (often done). s69(2) TA 1925: express provisions/contrary intention prevail over implied powers. e.g. Re Turner's WT : trust for grandchildren who attain age 28; express power to maintain from age 21 + instruction to accumulate surplus; 1 b. died at 24 ? no vested interest: contrary intention in instrument (to accumulate income) overruled s31(1)(ii).
Maintenance from Income: s31 Trustee Act 1925
- s31: power to apply income for maintenance + accumulated surplus income during minority. minority: 18 (since Family Reform Act 1969; previously 21). 2 possible situations where s31 applies:
1. b. is unmarried minor ('infant').
2. b. has attained majority or earlier married + has contingent interest.
Present income (from current year):
- Beneficiary under 18: s31(1)(i) - ts. can pay/apply income for maintenance, education or benefit. b. has no right to income under 18: even if interest vested. minors cannot give valid receipt: ts. should never pay money directly to b. under 18. tax implications: Stanley v IRC : infant life tenant, trustee accumulated income until majority, on majority: b. assessed to surtax on accumulated income paid to him ? [Ld Greene]: income 'not his in any real sense' during minority; 'title held in suspense' + destroyed if b. dies before 18 ? 'for all practical purposes in same position as if interest contingent'. exercise: can pay to parent/guardian or otherwise apply income (e.g. pay school fees directly). b. can have any interest: vested or contingent (or vested but liable to divesting). may use whole or part of income: any income not used ? accumulated - s31(2). accumulations: may be used for b's benefit in addition to income in subsequent years of minority - s31(2)(ii). subject to any prior interests/charges: e.g. if b. remainderman, no income until life tenant life tenant dies or surrenders interest. no obligation: ts. must consider 'all the circumstances' (inc. b's age + requirements). should consider exercise: no automatic payments - Wilson v Turner . in practice: if ts. act in good faith, court unlikely to interfere. may incidentally benefit another: if ts. exercising discretion in best interests of b.
Buy the full version of these notes or essay plans and more in our GDL Equity and Trusts Notes.