Chapter 13 Multiple choice questions

* not completed

. "A power granted to trustees under which the trustees may, at their discretion, apply trust income for the benefit of infant beneficiaries". What does this define?

Power of Advancement correct incorrect

Power of Accumulation correct incorrect

Power of Maintenance correct incorrect

Power of Appointment correct incorrect

* not completed

. Which of the following factors must be taken into account by trustees when exercising a power of maintenance under the Trustee Act 1925?

The express terms of the trust instrument. correct incorrect

Whether the payment is reasonable having regard to the age of the infant. correct incorrect

Availability of other income applicable for the same purposes. correct incorrect

All of the options given are correct. correct incorrect

* not completed

. Trustee Act 1925 section 31(3) states that the power of maintenance applies in the case of a contingent interest only if the limitation or trust carries the intermediate income. Which of the following dispositions is presumed not to carry the intermediate income?

Future specific devise or bequest of real property. correct incorrect

Contingent specific devise or bequest of real property. correct incorrect

Contingent pecuniary legacy. correct incorrect

Contingent residuary devise of freehold land. correct incorrect

* not completed

. Which of the following factors must be taken into account by trustees when exercising a power of advancement under the Trustee Act 1925?

Whether the beneficiary is over the age of 21. correct incorrect

Whether the beneficiary is an infant. correct incorrect

Whether the beneficiary is embarking on a new career. correct incorrect

None of the options given is correct. correct incorrect

* not completed

. Which of the following statements is true?

Trustees may exercise the power of advancement if persons other than the intended beneficiary might incidentally benefit from the exercise of the power. correct incorrect

Trustees may not exercise the power of advancement if persons other than the intended beneficiary might benefit from the exercise of the power. correct incorrect

Trustees may exercise the power of advancement provided that persons with an interest prior to that of the intended beneficiary will also benefit from the exercise of the power. correct incorrect

Trustees may exercise the power of advancement only once in the case of each beneficiary; the power is then said to have been "exhausted". correct incorrect

* not completed

. In 2010 a gift was made by way of trust for A and B in equal shares upon their graduating from university. The trust fund is valued at £100,000. What is the maximum payment by way of advancement that can be made, today, to A? (Assume that A has not previously received moneys from the fund.)

£50,000 correct incorrect

£25,000 correct incorrect

£100,000 correct incorrect

None correct incorrect

* not completed

. In 2010, a gift was made by way of trust for A and B in equal shares upon their graduating from university. The trust fund is valued at £100,000. By way of advancement, the trustees pay £25,000 to A (who had not previously received moneys from the fund) and subsequently the remaining £75,000 worth of trust property increased in value and is now estimated to be worth £300,000. What is the maximum that the trustees may now pay to B by way of advancement?

£81,250 correct incorrect

£150,000 correct incorrect

£162,500 correct incorrect

£75,000 correct incorrect

* not completed

. In this chapter we have encountered the definition of "personalty". Which of the following is NOT personalty?

A Lease correct incorrect

Money in a joint bank account correct incorrect

A Freehold correct incorrect

A car correct incorrect

* not completed

. The general rule is that a "contingent pecuniary legacy" will not carry the intermediate income (Re Raine [1929] 1 Ch 716). There are exceptions to the rule. Which of the following is NOT an exception?

Where the testator was the parent of an adult legatee. correct incorrect

The exception is based on the presumed intention of the testator. correct incorrect

The exception is based on the presumed intention of the testator. correct incorrect

The exception is based on the presumed intention of the testator. correct incorrect

* not completed

. Which of the following words or phrases is a synonym of "advancement" as that word is used in the context of the Trustee Act 1925 s.32?

Advantage correct incorrect

In advance correct incorrect

Loan correct incorrect

Installment correct incorrect