Explain what remedies malcolm

Reference no: EM133682442

Bob Martin is the settlor of the Wonder Family Trust which was established to provide for the children of Arthur and Carole, who were Bob's brother and sister-in- law, both of whom are now deceased. Both Bob and Alice were appointed as Trustees of the Wonder Family Trust. The beneficiaries of the trust are Malcolm, Eli and Angus, all of whom are 3- year- old triplets. All of the children are capital and income beneficiaries of the trust.

The trust deed states that Bob as settlor has placed $250,000 in the Wonder Family Trust bank account. Further, the trustees Bob and Alice are obliged to maintain at least that amount in the trust account for the next 15 years and must accrue any income on that amount in 'Retained Income'. Once the 15 years have expired, Bob and Alice may distribute the trust income to any or all of the triplets provided they have obtained an undergraduate degree from a recognised Australian University.

The trust deed further provides that after a further 5 years, Bob and Alice must distribute the remaining trust funds in equal shares of capital and income to each triplet. Alice hears about an investment opportunity which 'cannot fail'. Without consulting Bob, Alice withdraws $100,000 from the capital of the Trust Fund and invests $50,000 in a timber plantation. Unfortunately, the timber plantation fails due to the high levels of rain received over summer which causes the tree roots to rot. Alice uses the remaining $50,000 to buy an electric vehicle for herself. Bob is appalled by what Alice has done without his knowledge

Answer the following questions using the ILAC Methodology (Issue, Law, Application, Conclusion)

1. Describe what rights Malcolm, Eli and Angus have in the first fifteen years' period and in the second five years' period?

2. Explain what remedies Malcolm, Eli and Angus have against Alice and /or Bob?

3. Do you consider this trust structure is the most appropriate structure for use in these circumstances or can you suggest an alternate structure which would have better provided for Malcolm, Eli and Angus in the event of Arthur's and Carole's deaths?

Reference no: EM133682442

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