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Question 1

The purpose of maintenance under Section 31 of the Trustee Act 1925 is to allow the trustees to:

a) Pay money to the life interest's ex-spouse

b) Help the principal beneficiaries with any financial problems

c) Help pay for the daily living expenses and education of infant beneficiaries

d) Pay income to a beneficiary with a vested interest

Question 2

Maintenance is still possible even if:

a) There is a discretionary trust

b) There is a life interest

c) The parents of the child already have sufficient money to raise the child

d) The equitable interest of the beneficiary does not carry intermediate income

Question 3

A beneficiary becomes entitled to the income produced by their equitable interest when:

a) They reach the age of 21

b) Their interest becomes vested

c) Their parents agree

d) They attain the age of 18

Question 4

'Advancement' in section 32 of the Trustee Act 1925 means:

a) Giving a beneficiary their share of the capital before they are entitled to it

b) The establishment in life of the beneficiary

c) Giving the share of capital of a parent to their child

d) Giving a beneficiary their share of the capital before they reach the age of majority

Question 5

Which of the following statements is correct? An advancement is not permitted:

a) To avoid tax

b) To set the beneficiary up in business

c) To pay school fees

d) To pay off the debts of the parents

Question 6

The consent of the following is required before an advancement can be made:

a) The parent of a child

b) The child who receives the advance

c) The court

d) A prior interest

Question 7

Why was the consent of the children necessary to the advances made in In Re Pauling's Settlement Trusts 1964?

a) Because of the terms of Section 61 of the Trustee Act 1925

b) Because they were below the age of majority

c) Because the advances were improper and the children were subject to the undue influence of their parents

d) Because of the special terms of the Pauling's Settlement Trusts

Question 8

The purpose of a Protective Trust is to:

a) Provide for the maintenance and support of the principal beneficiary, spouse and children

b) Defraud creditors

c) Avoid tax

d) Prevent the principal beneficiary from becoming bankrupt

Question 9

How does a Protective Trust work?

a) The principal beneficiary is bankrupted

b) The principal beneficiary cannot be sued for debt

c) The beneficiaries cannot be sued for debt

d) Upon a determining event, the trust property is held upon a discretionary trust

Oxford University Press, Online Resource Centre, Chapter 05.

Chapter 05

Instructions