Unpaid Present Entitlements (UPE)

Context and Why This Exists

A trust that resolves to distribute income to a beneficiary, but does not pay it, owes the beneficiary that amount. The amount owed is an unpaid present entitlement (UPE). A UPE can stay unpaid for years. It can also be paid in part, put on a sub-trust, or turned into a loan.

A distribution records what was distributed on a date. A UPE records what is still owed, from the date it arose until the date it is paid out.

What the Feature Does

A UPE is a relationship from a trust to the party it owes:

Entitlement amount: whole dollars, required.
Date entitlement arose: usually 30 June, the date of the trustee's resolution. Required.
Date paid out: optional. Leave it blank while the UPE is outstanding.

A trust can owe a UPE to an individual, a company, another trust, an SMSF or a partnership. It cannot owe one to itself, to an asset or to a joint holding. A trust can owe the same beneficiary several UPEs, one for each year.

How to Use It

Add a UPE from the trust

Open the trust and choose Add Relationship.
Choose UPE Owed To, then the beneficiary.
Enter the entitlement amount and the date it arose.

Add a UPE from the beneficiary

Open the beneficiary and choose Add Relationship.
Choose UPE Owed By, then the trust.
Enter the amount and the date.

Add a UPE on the diagram

Draw a link from the trust to the beneficiary and choose UPE Owed To.

Record that it was paid

Edit the UPE and enter the Date paid out. To record a partial payment, change the amount to what is still owed.

How Diagram Display Works

A UPE draws as a dashed financial link labelled with its amount, for example UPE ($120.0K).
Turn it on or off under Financial Links in diagram settings.
With an "as at" date (Snapshot Filtering), a UPE shows while it is outstanding: on or after the date it arose, and up to and including the date it was paid out.

UPEs and Distributions

You can record a UPE with or without the distribution behind it. If you have only the closing balance from the trust's accounts, record the UPE alone. The two are not linked: changing a distribution does not change the UPE.

Documents

Attach the trustee's distribution resolution and any correspondence to the UPE from its Edit dialog. See Relationship Documents.