In situations where the trust fund is insufficient to accommodate all primary trust beneficiaries, how is the remaining trust fund disbursed to them?
Take for example Trust Beneficiary A & B are both supposed to receive $100,000 each when they have completed tertiary education. The Trust Fund however has only $100,000 balance.
Any income, expenditure and distribution shall be treated as arising WHEN PAYABLE, and not from day to day, so that no apportionment shall take place.
The payout “condition” met EARLIER will be able to claim from the Trust Fund FIRST, such that it does not need to reserve to cater for any payout “conditions” met later.
If A graduates on 1 January 2030 while B graduates on 2 January 2030, A will receive the full sum of $100,000. The Trust Fund will then be exhausted; hence B will receive nothing.
If there are Trust Beneficiaries who are entitled to receive specific payout at the SAME TIME but there is insufficient Trust Fund to fulfil them, the remaining Trust Fund shall be divided proportionally and paid to them.
If the “condition” happens at the same time, it will be split proportionately.
Take the same example where Trust Beneficiary A & B are both supposed to receive $100,000 each when they have completed tertiary education. The Trust Fund however has only $100,000 balance. Both A & B graduates at the SAME TIME, A & B will receive $50,000 each.