The Trustee’s Dilemma: Helping One Beneficiary Without Unfairly Favouring Them

Best Answer: D

A contingent interest absolutely qualifies a beneficiary to receive an advancement. The entire purpose of a power of advancement is to allow capital to be given before an interest vests.

Under Section 69(2) of the Trustee Act 1925, express powers conferred by a trust instrument operate independently of, and can override, statutory restrictions. While the statutory power of advancement under Section 32 of the Trustee Act 1925 contains a strict limit (preventing advances that exceed the beneficiary's presumptive share), Fiona is not bound by this statutory limit because she possesses a wide express power in the trust instrument to "apply or transfer capital... in such manner as the trustee considers appropriate." 

The only limit on Fiona here is her core fiduciary duties: she must act in good faith, ensure it genuinely benefits Daniel, and properly balance his request against Erin’s competing interest in the remaining fund.

The fact that the proposed advancement exceeds Daniel’s expected share does not automatically invalidate the exercise of the power, although it is a highly relevant factor that Fiona must consider when deciding whether the advancement is appropriate.