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Problem scenario
Wilhelm, who died in 2013, left the residue of his estate in trust for his grandchildren, Betty and Andrew, at the age of 25, in equal shares absolutely. The trustees have invested the fund and accumulated all the income on it. The capital value of the fund is now £20,000.
Betty is 19 years old; Andrew is 12.
The trustees have received the following requests:
First, they have been asked to transfer £4,000 into a trust fund set up by the children's uncle in 2000 under which the fund trustees may, in their sole discretion, pay income or capital to any of his nephews or nieces who are students at university, and any capital remaining after a period of 21 years will be divided equally between all his nephews and nieces. At present the fund is valued at £6,000 and Betty is the only eligible beneficiary.
Secondly, Andrew's parents have asked the trustees to pay all the income of the fund to them for 10 years to enable them to meet the initial running costs of a riding school which they propose to establish at their home. Andrew is interested in riding and supports the proposal.
Advise whether the trustees may comply with these requests.