Leicester De Montfort Law School

Equity & Trusts

Outline Answer to Past Exam Question – Maintenance & Advancement

Introduction
Explain the power of maintenance and advancement
Powers not duties
Where does the power come from? Here S31/32 TA 1925 as nothing
expressed in the trust instrument.

Gift A
Maintenance
Discretion – Klug v Klug
Maintenance education benefit – Broad interpretation -Apply
As trust created prior to October 2014, duty to consider what is reasonable in
the circumstances – age/circumstances/what is income required for/other
funds available - Apply
Duty to pay at 18yrs unless contrary intention but only 16 at present
Gift must carry the intermediate Income - Explain
Pecuniary legacy doesn’t carry the II. – Re Raine
There are exceptions but not applicable here. Even if Michelle was her mother
the gift is contingent on reaching 25 not 18 as required by the act. S31(3)

Advancement
Discretion
Capital monies – Apply
Advancement or benefit – explain and apply
Pilkington v IRC – Improves material situation
Examples of advancement or benefit – Re Clore/Re Kershaw
Provisos (only advance half/bring into account/cannot prejudice a life interest)
– explain and apply.

Gift B
At the age of 28 she would normally be entitled to the new income. S31(1)(ii)
Under S 31(2) (ii) the income up to the age of 18 can be accumulated and
added to the capital for her at 28 in cases where the interest is contingent as it
is here.

Advancement – As with previous gift

Discussion of contrary intention – S69(2) Re McGeorge

Gift C
Maintenance is irrelevant as it refers only to capital.

Advancement
Discretion
Capital monies – Apply
Advancement or benefit – apply
Pilkington v IRC – Improves material situation
Examples of advancement or benefit – Re Clore/Re Kershaw
Is there a benefit here? Did Jason to survive another 7 years.
Can S32 be used to re settle? - Pilkington v IRC
Discretionary trust so cannot use advancement.

Provisos – life interest here, so even if could advance would need consent in
writing from Jason.