Amongst the countless legal issues that arise in the creation of
a trust, the rules governing when property settled on trust must
vest are often the most difficult but yet underrated. In other
words, the point when capital and income of the trust are owned
absolutely (i.e., legally and beneficially) freeing those entitled
to the same (the beneficiaries), to dispose or otherwise deal with
the property as they wish. It suffices to say that appreciating the
mechanics of the rule is of critical importance today, as when it
was formulated ab initio.
It is generally understood that a trust is an arrangement where
one person or institution (a trustee), holds settled property of
another (the settlor) for the benefit of others (beneficiaries).
While trust arrangements remain perfectly permissible, the law has
always been concerned to ensure that property settled within such
structures is not unduly tied up in a manner precluding future
dealings with it.
