What powers do trustees have?

Prepare for the ATT Law Exam. Practice with multiple choice questions, each providing hints and explanations. Be well-prepared for exam day!

Multiple Choice

What powers do trustees have?

Trustees have the authority to manage and distribute trust assets within the terms of the trust deed. Two common powers you’ll see are to make maintenance payments out of income for minor beneficiaries and to advance capital to beneficiaries who are not yet entitled to capital. Paying maintenance out of income for minors means using the trust’s income to cover the ongoing needs of young beneficiaries (education, living costs, etc.) without dipping into the capital itself. This helps support them while preserving the capital to be used when they’re due to receive their full share. Advancing capital to beneficiaries not yet entitled to capital allows a trustee to provide some of the value of the trust early, before the beneficiary’s formal entitlement arises. This is done in a way that aligns with the trust’s purpose and the instrument’s provisions, so they can benefit sooner while keeping track of how much capital remains to be received in the future. Dissolving the trust at any time is not a general right of a trustee; termination or dissolution typically happens only when the trust ends or by proper legal processes, not at will. Selling trust property for personal use would breach the trustee’s fiduciary duties; any sale must be for the trust’s purposes and in the trust’s best interests, not for the personal benefit of the trustees. Changing the beneficiary designation at will is not permissible; beneficiary changes generally require the terms of the trust or a legal process, not unilateral action by the trustee. So the correct description captures the kinds of distributions trustees are empowered to make to support minors and to advance capital when appropriate.

Trustees have the authority to manage and distribute trust assets within the terms of the trust deed. Two common powers you’ll see are to make maintenance payments out of income for minor beneficiaries and to advance capital to beneficiaries who are not yet entitled to capital.

Paying maintenance out of income for minors means using the trust’s income to cover the ongoing needs of young beneficiaries (education, living costs, etc.) without dipping into the capital itself. This helps support them while preserving the capital to be used when they’re due to receive their full share.

Advancing capital to beneficiaries not yet entitled to capital allows a trustee to provide some of the value of the trust early, before the beneficiary’s formal entitlement arises. This is done in a way that aligns with the trust’s purpose and the instrument’s provisions, so they can benefit sooner while keeping track of how much capital remains to be received in the future.

Dissolving the trust at any time is not a general right of a trustee; termination or dissolution typically happens only when the trust ends or by proper legal processes, not at will.

Selling trust property for personal use would breach the trustee’s fiduciary duties; any sale must be for the trust’s purposes and in the trust’s best interests, not for the personal benefit of the trustees.

Changing the beneficiary designation at will is not permissible; beneficiary changes generally require the terms of the trust or a legal process, not unilateral action by the trustee.

So the correct description captures the kinds of distributions trustees are empowered to make to support minors and to advance capital when appropriate.

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