This is an extract of our Explaining Administration Clauses document, which we sell as part of our Private Client Notes collection written by the top tier of Cambridge And Oxilp And College Of Law students.
The following is a more accessble plain text extract of the PDF sample above, taken from our Private Client Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
Elective: Private Client
Trustees Powers: Explaining Administration Clauses S.31 Maintenance - Trustees Act 1925 amendedAmendment: trustees given absolute discretion instead of having to be reasonable. "This is a important clause in the Will which gives your trustee [NAME?] the power to look after / provide for any young members of your family who inherits under the will. [NAME minor beneficiary]. If / when he inherits under your will, the trustee will be in charge of providing for his education and his general daily expenses by using any money that the estate generates [this is referred to as 'income' - it represents funds such as rental income; dividends from shares; By allowing the trustee absolute discretion to use this money, you are making it easier for the trustee to perform his role. Usually under statute the trustee is restricted in performing this role and he is required by law to be "reasonable" and consider
[NAME of B] age, circumstances and other sources of income when exercising this power. This can often lead to later conflict over this issue of what is reasonable - something which I am sure you wish to avoid. This amendment therefore allows your trustee to use his discretion more freely without risk of being challenged. The clause does highlight the important role your trustee is required to perform. By giving him / her this power you must be sure you are completely confident in their ability to perform the role.Amendment: Where beneficiary has a contingent interest [i.e. he must attain age of 25 to receive the legacy] then the will can remove the right for B to receive the income at 18: Under statute law the beneficiary [name] will be entitled to receive the income ["any money coming into the estate"] once he has reached the age of 18 - despite your wishes that he not receive the lump sum / everything you own until he is 25. The trustee's role for looking after the beneficiary [name] is effectively over and your trustee will no longer have the power to use his discretion over how the money should be used [the power described above]. The drafted clause in your will has removed the right for the beneficiary [name] to receive all the income/ lump sum at 18. Instead, the trustee's power to use his discretion over the funds will continue until beneficiary [name] has reached [AGE - 25]. This is particularly suitable if you feel beneficiary [name] will be too young to receive the substantial sum of income that your will provides for him.
NB. CAPITAL and INCOME: the capital is the underlying value of the assets in the trust and the income is the cash - typically dividends, interest and rent, which those assets generate. So if you have a house in a trust the house would be a capital asset and if it were let the rent would be income. If you have shares then the shares are the capital asset and the dividends are the income.
S.32 Advancement - Trustee Act 1925 amended1
Amendment: remove the limitation that requires trustee to only use up to half of the
Buy the full version of these notes or essay plans and more in our Private Client Notes.