Chapter 11 Looking for extra marks

. Amina is the solicitor for the Tancock Trust, which is currently involved in litigation with Star Systems Ltd. She is approached by a representative of Star Systems Ltd who pays her £250,000 in return for encouraging the Tancock Trust to settle its claim rather than going to court. Amina takes the money and uses it to purchase a holiday home in Sydney, Australia.

One year later, the Tancock Trust discovers that Amina has accepted money from Star Systems Ltd. They also discover the Sydney property bought with the money, which is now worth £350,000.

What can the Tancock Trust claim?

Nothing

£100,000 (the profit from the bribe)

£250,000 (the value of the bribe)

£350,000 (the value of the bribe and profits accrued)

. Simon and Kathryn are trustees for Tony (30), Andy (24) and Kevin (16). Having run the trust successfully for 5 years, a dispute arises after Kathryn takes some money from the trust to pay a credit card bill. While she has apologized repeatedly and has fully repaid the trust, the beneficiaries feel that they can no longer trust Kathryn and wish to have her removed as a trustee and replaced with their uncle, Sylvester. Kathryn feels extremely guilty and wants to stay on as a trustee to make up for her actions.

Which of the following sections is most relevant to allowing the beneficiaries to remove Kathryn?

Section 41 Trustee Act 1925.

Section 19 Trusts of Land and Appointment of Trustees Act 1996.

Section 20 Trusts of Land and Appointment of Trustees Act 1996.

Section 39 Trustee Act 1925.

. According to Nestlé v National Westminster Bank plc [1993], when investing trust funds, trustees must act even-handedly in respect of the different interests of life tenants and remaindermen. Which of the following statements best describes these interests?

The life tenant is entitled to the income of the trust, while the remainderman is entitled to the capital of the trust.

The life tenant is entitled to income of the trust for his lifetime. When he dies, the income will go to the remainderman.

The life tenant is entitled to the capital of the trust, while the remainderman is entitled to the income of the trust.

The life tenant is entitled to maintenance, while the remainderman is entitled to an advancement.

. Which of the following statements are true?
1 - Schmidt v Rosewood Trust [2003] establishes that the beneficiaries' right to information is based on their proprietary interest in the trust.
2 - In contrast to Re Londonderry's Settlement [1965], Schmidt v Rosewood Trust [2003] suggests that there may be circumstances in which confidential information held by trustees may have to be disclosed.
3 - Members of a class to benefit under a discretionary trust are not entitled to information about the trust.
4 - Re Beloved Wilkes' Charity (1851) establishes that if there is evidence that the trustees acting in bad faith, the court may order disclosure of documents revealing how the trustees have exercised their discretion.
5 - In O'Rourke v Darbishire [1920], the House of Lords argued that the beneficiaries' right to information was an aspect of the courts' inherent jurisdiction to supervise trusts.

1, 3 and 5

2, 3 and 4

2, 4 and 5

3, 4 and 5

. Derek's will contains the following provisions:
'To my daughter, Maxine, 1000 shares in BrightLite Technologies Ltd to be held on trust until you are 25. To my son, Jonathan, £50,000 to be held on trust until he too turns 25.'
Maxine is currently 22 and Jonathan is 16.
Which of the following statements most accurately represents the children's options?

Maxine can apply for maintenance and Jonathan can claim the interest generated by the £50,000.

Maxine can ask for one-third of the capital to be advanced to her and Jonathan may apply for maintenance.

Maxine is entitled to the dividends of the shares but Jonathan cannot apply for any maintenance.

Maxine is entitled to an advancement but Jonathan may not apply for maintenance.

Chapter 11 Looking for extra marks

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