Duties

Question 1

Define trustee.

Answer 1

An individual or organization managing assets on behalf of another party.

Question 2

What is the Trustee Act 2000?

Answer 2

A UK law that outlines the duties and powers of trustees.

Question 3

True or false: Trustees must act in the best interest of the beneficiaries.

Answer 3

TRUE

This duty is fundamental to the role of a trustee.

Question 4

Fill in the blank: Trustees must exercise ______ in managing trust assets.

Answer 4

care

Question 5

What does duty of loyalty mean for trustees?

Answer 5

Trustees must prioritize the interests of beneficiaries over their own.

Question 6

Define investment power under the Trustee Act 2000.

Answer 6

The authority of trustees to invest trust funds in various assets.

Question 7

True or false: Trustees can delegate their duties without restrictions.

Answer 7

FALSE

Trustees must ensure delegated tasks are performed competently.

Question 8

What is the duty to inform beneficiaries?

Answer 8

Trustees must keep beneficiaries informed about the trust’s administration.

Question 9

Fill in the blank: Trustees must avoid ______ transactions.

Answer 9

conflicted

Question 10

What is the prudent investor rule?

Answer 10

Trustees must invest trust assets as a prudent investor would.

Question 11

Define trust property.

Answer 11

Assets held by a trustee for the benefit of beneficiaries.

Question 12

True or false: Trustees can profit personally from trust transactions.

Answer 12

FALSE

Personal profit from trust transactions breaches fiduciary duty.

Question 13

What is the duty of impartiality?

Answer 13

Trustees must treat all beneficiaries fairly and without bias.

Question 14

Fill in the blank: Trustees must keep accurate ______ of trust transactions.

Answer 14

records

Question 15

What is the duty to account?

Answer 15

Trustees must provide beneficiaries with an account of trust finances.

Question 16

Define fiduciary duty.

Answer 16

A legal obligation to act in the best interest of another party.

Question 17

True or false: Trustees can change the terms of the trust unilaterally.

Answer 17

FALSE

Changes require consent from beneficiaries or court approval.

Question 18

What is the duty of confidentiality?

Answer 18

Trustees must keep trust information private and secure.

Question 19

Fill in the blank: Trustees must act ______ and honestly.

Answer 19

fairly

Question 20

What is the power of appointment?

Answer 20

The authority to designate beneficiaries or distribute trust assets.

Question 21

Define trustee’s indemnity.

Answer 21

Protection for trustees against liabilities incurred while performing their duties.

Question 22

True or false: Trustees must invest in high-risk assets to maximize returns.

Answer 22

FALSE

Trustees must balance risk and return according to the trust’s objectives.

Question 23

What is the duty to preserve trust property?

Answer 23

Trustees must take reasonable steps to protect and maintain trust assets.

Question 24

Fill in the blank: Trustees must ensure ______ of trust assets.

Answer 24

diversification

Question 25

What is the **duty to act**?

Answer 25

Trustees must actively manage the trust and its assets.

Question 26

Define **beneficiary**.

Answer 26

An individual or entity entitled to benefit from a trust.

Question 27

True or false: Trustees can ignore the trust document if they disagree with it.

Answer 27

FALSE ## Footnote Trustees must adhere to the terms outlined in the trust document.