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To Pay or Not to Pay: Deciphering a Minor Beneficiary's Request for Overseas Tuition

Janina White

17 Aug 2023

When a 14-year-old beneficiary approaches trustees with a request to cover her tuition fees for five years in a school abroad, a myriad of considerations come into play. It's not just about the money; it's about the legal obligations, the future implications, and the long-term sustainability of the trust. This article delves deep into these aspects.

Key Considerations

The Power of Maintenance: This provision indicates that a beneficiary must be a minor, which in England and Wales means under the age of 18. Moreover, the beneficiary shouldn't be absolutely entitled to the income according to S. 31(2)(ii) of the Trustee Act 2000.

Income Entitlement: Given the stipulations of S. 31(3) of the Trustee Act 2000, there should be 'intermediate income' without any third-party claim. The crux of the matter here is the clarity in division of such income among all beneficiaries. Would the beneficiary's share suffice to cover her tuition?

Defining Power: Trustees have the power to utilize trust income for beneficiaries' education, maintenance, or other benefits. The terms are defined distinctly. While 'education' retains its regular meaning, 'maintenance' pertains to day-to-day expenses and 'benefit' casts a broad net, potentially encompassing indirect gains like future career prospects.

Duty of Care & Regular Checks: Although the Trustee Act 2000's duty of care isn't applicable here, trustees should periodically review ongoing payments. Especially when the beneficiary hits 18, the five-year commitment could demand a reevaluation.

Advancement vs. Payment: It's worth pondering whether a direct advancement might be more fitting than continual payments.

Other Beneficiaries: The presence of other beneficiaries benefiting from an advancement might argue in favor of upfront payments. The trustees could negotiate a lump sum fee payment with the school, possibly receiving a discount. Also, given the minor's lack of legal ownership of trust funds, she might qualify for scholarships or bursaries.

Living Abroad: Living expenses in a foreign land can be a significant financial drain. Will the trust's income cover these expenses, or will further advancements be required?

Guardianship Considerations: If the trustees are the primary guardians in the absence of any living parent, they'll have to ensure that the school fees cover boarding and supervision or make arrangements for her care.

School Location: The choice between an international school and a domestic one of equal quality can be critical. A UK-based school might offer the beneficiary better chances for financial assistance.

Research & Deliberation: It's imperative for trustees to research all available financial support options and potential educational locations. The beneficiary's request demands serious contemplation.

In Conclusion

Navigating a minor beneficiary's request for overseas education funding is no simple task. It's a labyrinth of legal obligations, financial considerations, and future implications. Trustees must weigh each facet meticulously, ensuring that they uphold the trust's sanctity while championing the beneficiary's aspirations.

Janina is a solicitor registered in England and Wales, and the Republic of Ireland, and a member of the American Bar Association. Her extensive legal expertise spans Corporate Law, Sanctions, and Corporate Governance. Beyond law, Janina is a Chartered Company Secretary and showcases a passion for global cultures, evident in her fluency in eight languages. Advising multinational giants, her unique blend of legal acumen and cultural insight sets her apart, offering readers a rich, global perspective on her subjects. Janina is also a private investigator and a member of the Association of British Investigators and she is actively using the investigative techniques (including the use of the Artificial Intelligence, OSINT and HUMINT)  in her legal work.

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