importated

Question 1

Core fiduciary obligation of trustees

Answer 1

To hold, safeguard and administer trust property strictly in accordance with the trust deed and for the benefit of the beneficiaries

Question 2

Interaction between trust deed and statute

Answer 2

Statutory powers apply unless overridden or restricted by the trust deed

Question 3

Legal ownership responsibility of trustees

Answer 3

Trustees must hold legal title and ensure correct registration of all trust assets

Question 4

Consequence of failure to protect trust property

Answer 4

Trustees may be personally liable for loss caused by default or bad management

Question 5

Requirement for trustee decision-making in England and Wales

Answer 5

All trustees must agree unless the trust deed expressly provides otherwise

Question 6

Scope of statutory duty of care under Trustee Act 2000

Answer 6

Applies to investments, land acquisition, appointment of agents, nominees, custodians and insurance

Question 7

Standard of care for professional trustees

Answer 7

Higher than for lay trustees due to expertise and remuneration

Question 8

Trustee duty when trust receives cash

Answer 8

Cash must be invested wisely unless paid out immediately

Question 9

Investment powers prior to Trustee Act 2000

Answer 9

Restricted to authorised investments under Trustee Investments Act 1961

Question 10

Investment powers under Trustee Act 2000

Answer 10

Trustees may invest as if they were absolute owners subject to duty of care

Question 11

Limitation on Trustee Act 2000 investment powers

Answer 11

Does not override restrictions contained in the trust deed

Question 12

Standard investment criteria requirement

Answer 12

Trustees must consider suitability of investments and diversification

Question 13

Ongoing investment management obligation

Answer 13

Trustees must keep investments under review and vary them if appropriate

Question 14

Obligation to obtain investment advice

Answer 14

Proper advice must be obtained unless reasonably unnecessary or inappropriate

Question 15

Circumstances where advice may not be required

Answer 15

Small trust fund or trustees possess sufficient expertise

Question 16

Additional investment duty of professional trustees

Answer 16

Must consider tax position of the trust and beneficiaries

Question 17

Trustees’ accounting obligation

Answer 17

Trustees must keep proper and accurate trust accounts

Question 18

Beneficiaries’ information rights

Answer 18

Entitled on demand to accounts and reasonable trust information

Question 19

Trustees’ liability standard

Answer 19

Personally liable for losses arising from breach of trust

Question 20

Conflict of interest rule

Answer 20

Trustees must avoid conflicts, including where trustee is also a beneficiary

Question 21

Source of trustees’ express powers

Answer 21

The trust deed

Question 22

Typical power in a share portfolio trust

Answer 22

Power to buy and sell shares to exploit market opportunities

Question 23

Typical powers in a life policy trust

Answer 23

Pay premiums, make claims, exercise options and switch funds

Question 24

Statutory powers supplementing the deed

Answer 24

Provided by the Trustee Act 1925

Question 25

Power to apply income for infant beneficiaries

Answer 25

Income may be used for maintenance, education or benefit

Question 26

Default age of income entitlement

Answer 26

Age 18 unless the trust deed specifies otherwise

Question 27

Settlor control over income entitlement age

Answer 27

Settlor may postpone entitlement beyond age 18

Question 28

Statutory power of advancement after 1 October 2014

Answer 28

Trustees may advance up to the whole of a beneficiary’s presumptive share

Question 29

Meaning of advancement in trust law

Answer 29

Early application of capital to or for a beneficiary

Question 30

Advancement where beneficiary interest is contingent

Answer 30

Permitted even if interest may be defeated or reduced

Question 31

Restriction where another beneficiary has income entitlement

Answer 31

Consent of that beneficiary must be obtained before advancement

Question 32

Statutory advancement power before October 2014

Answer 32

Limited to a maximum of half of the trust capital

Question 33

Treatment of advanced capital on final entitlement

Answer 33

Advancement must be brought into account against beneficiary’s share

Question 34

Trustee Act 2000 power to acquire land

Answer 34

Trustees may acquire freehold or leasehold land in the UK

Question 35

Permitted purposes for land acquisition

Answer 35

Investment, occupation by beneficiaries or any other reason