Partial termination of life interest - s.32 Trustee Act 1925


(Michael Micklethwait) #1

Good Afternoon

I have a 1951 lifetime settlement where the life tenant wishes to raise a small amount of capital (5%) – no powers to advance capital from the settlement – Could she raise this capital by way of a deed of
partial termination of her life interest in favour of the remainderman (her son) utilising S.32 - assuming Son will then give the money to her.

Any suggestions appreciated

Michael Micklethwait
Dunn & Baker


(Paul Saunders) #2

This looks to be a fraud on the power. Any remainderman would have the
right to object.

If the son is the only possible remainderman, he could consent to the
proposal, thus waiving his right to challenge it at a later date.

If multiple remaindermen, consent of all would be required on Saunders
v. Vautier principle.

Paul Saunders


(Paul) #3

If the son’s interest is vested then a better solution might be if he will assign 5% of his interest to the life tenant - so that the life tenant becomes absolutely entitled to 5% of the trust fund.

Paul Davies
Clarke Willmott


(Michael Micklethwait) #4

Thanks Paul – only one remainderman and he will consent

Michael Micklethwait
Dunn & Baker