Beneficiaries don't always wait until they're absolutely entitled to see any of the trust money. A young beneficiary might need help buying a first home, funding a business, or covering education costs — and trustees can sometimes release capital early to make that happen. As a solicitor advising trustees, you'll be the one telling them whether they can do this, how much they can pay, and what steps they must take to do it properly. Get it wrong and the payment can be invalid, exposing the trustees personally.
This lesson walks you through a complete advancement, step by step:
- The Power and Eligible Beneficiaries — what advancement is, where it comes from, and which beneficiaries can benefit from it.
- Conditions and the Statutory Limit — the conditions trustees must satisfy and how much capital they're allowed to advance.
- Advancement or Benefit — what purposes genuinely count, and why the power can't be used to help someone else.
- Consent of Prior Interest Holders — when others must agree first, and the strict form that consent must take.
- Exercising the Power and Payment — the fiduciary duties trustees owe and the proper ways to pay, including for minors.
- Final Distribution and the Trust Instrument — how advances are accounted for at the end, and why you always read the deed first.