I don't think the legalities are a problem as long as you're both mature adults and realize the risks that accompany training a live blade. Most schools make the student sign a waiver at the beginning of any kind of training.
BJJ, MMA, Muay Thai, Western Boxing and now FMA all had me sign something before I started. I wouldn't think of holding anyone but myself responsible for past or future training injuries.
Both the student and the teacher need to make the decision together as to when the student is ready to step it up.
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