Test your understanding
(1). State whether the following statements are true or false.
A The law of trusts enables the legal ownership of an asset to be separated from the beneficial ownership of the same asset.
B The beneficiary of a trust is the legal owner of the trust’s assets.
(2). Identify which of the following is/are potentially valid reasons for creating a trust.
A The value of the assets in the trust can be preserved for a particular individual whilst the income generated by the assets is paid to someone else.
B An increase in the value of the assets within a trust can be excluded from the estate of the person who created the trust.
C The income generated by the trust assets can be paid to minor children without the need for them to be able to control and manage the assets.
(3). Which one of the following is a valid description of the remainderman of an interest in possession trust?
A The person who receives any income remaining after payments have been made to the beneficiary.
B The person who is entitled to the reversionary interest.
Answers