61Protective trusts, rules as to

##### 61. Protective trusts, rules as to (1) Where any income, including an annuity or other periodic income payment, is directed to be held on protective trusts for the benefit of any person (in this section called the principal beneficiary) for the period of his life or any less period, then during that period (in this section called the trust period) that income shall, without prejudice to any prior interest, be held on trust as by this section provided. (2) The income to which this section refers shall be held on trust for the principal beneficiary during the trust period or until, whether before or after the termination of any prior interest — (a) the principal beneficiary does, or attempts to do, or suffers, any act or thing; or (b) any event, other than an advance under any statutory or express power, happens, whereby, if the income were payable during the trust period to the principal beneficiary absolutely during that period, he would be deprived of the right to receive it or any part of it; and, in any of those cases, as well as on the termination of the trust period, whichever first happens, this trust of the income shall fail and determine. (3) Where the trust, to which subsection (2) refers, fails or determines during the subsistence of the trust period, then, during the remainder of that period, the income to which that subsection refers shall be held upon trust for the application thereof for the maintenance, education, advancement or benefit of all, or any one or more exclusively of the other or others, of — (a) the principal beneficiary and his, or her, spouse or de facto partner (if any) and his, or her, children or more remote issue (if any); or (b) where there is no spouse or de facto partner or issue of the principal beneficiary in existence, the principal beneficiary and the persons who would, if he were dead, be entitled to the trust property or the income thereof or the annuity fund (if any) or arrears of the annuity, as the trustee, in his absolute discretion and without being liable to account for the exercise of that discretion, thinks fit. (4) This section does not apply to trusts coming into operation before the commencement of this Act, and has effect subject to any variation, contained in the instrument creating the trust, of the trusts declared by subsections (2) and (3). (5) Nothing in this section operates to validate any trust that would, if contained in the instrument creating the trust, be liable to be set aside. [Section 61 amended: No. 28 of 2003 s. 202.]