Page 20 - Nexia SAB&T Trust Guide 2022

■ In the case of an impersonal trust (such as a charitable trust), the trust
object relates to the way in which persons who are to benefit from such a
trust (the beneficiaries) are typically described as a class of persons in such
a way that they can be objectively determinable, such as “students meeting
the following criteria”.
Common clauses relating to beneficiaries in the trust deed
Protection clauses
The trust deed may provide that any amount paid or accruing to any beneficiary
under the trust deed shall remain his sole and exclusive property, and no spouse of
such beneficiary shall at any time have or obtain a claim or right thereto. The clause
may also specifically state that any amounts paid or accruing to a beneficiary shall
not fall into the joint estate or any accrual regime of such a beneficiary, whether
the marriage be in or out of community of property.
Payments to a minor beneficiary
A trust deed may also include a clause which provides that the trustees will be
entitled to make payment of any amount (capital or income) due or payable to a
minor beneficiary to the guardian of such a minor child.
Rights of beneficiaries
■ A personal right against the trustee for the trustee’s compliance with his duties.
■ Rights in respect of the trust assets/income as stipulated in the trust
instrument which can be:
◆ Vested rights – assets and / or benefits vest in the beneficiaries, but are
administered by the trustees.
◆ Discretionary rights – trustees have full discretion to determine benefits of
beneficiaries. Thus, the beneficiaries in a discretionary trust have no right
to the income/capital until the trustees have exercised their discretion. All
they have is a hope of receiving something from the trust, and they will be
entitled to any asset/income only once it is distributed by the trustees.
Where a beneficiary accepts the benefits conferred by the trust deed, it can then
only be varied with the beneficiary’s consent.
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