Abstract:
Two alternative methods with potential to obtain higher incomes for income beneficiaries in a low-income environment are considered. The conferment of trustee powers to readjust capital and income by way of enlargement of the duty of impartiality is first discussed. The most difficult aspect of this method is that it overlooks the duty to maintain capital integrity as an aspect of the duty of preservation of trust capital. The article argues that reform proposals which do not overcome its strictures are flawed. The total return trust or unitrust, which is the second method, is conceptually sounder. But its economic or business foundations, this article argues, must be approved by the settlor when setting up the trust or otherwise by consent of all trust beneficiaries.