Solicitors Qualifying Examination (SQE) 2025 – 400 Free Practice Questions to Pass the Exam

A beneficiary can sell their remainder interest in a trust if that interest is vested, and seeking legal advice is prudent to ensure the transaction is carried out properly and legally. A vested remainder interest means that the beneficiary has a future interest that is certain to become possessory upon the occurrence of a specified event, such as the termination of the prior interest (e.g., upon the death of the income beneficiary).

Selling a vested remainder interest can provide the beneficiary with immediate liquidity instead of waiting until the trust terminates or the event occurs that triggers their interest. Legal advice helps clarify the terms, the implications of the sale, and ensures compliance with any specific provisions outlined in the trust document.

Other options suggest limitations that do not reflect the general legal principles around vested remainder interests. The restriction around encumbrances or specific court approvals might apply in certain cases but is not universally applicable to every sale of a vested remainder interest. Therefore, the correct answer is grounded in the understanding of what constitutes a vested interest and the importance of seeking legal counsel.