What type of duty do trustees have?
A fiduciary duty - a duty of trust to act in the best interest of the beneficiaries.
What must trustees avoid?
Must avoid any conflicts of interests with their own intersts
Do the trustees have a duty to not profit from the trust?
Yes, a trustee cannot put themselves in a position where their duty conflicts with personal interests
Can a trsutee purchase trust property>?
No they cannot purchase property owned by the trust.
What is the duty to observe the terms of the trust?
Settlor may have set out that the trustees have additional duties or powers
What is the duty to exercise reasonable care?
Trustees must meet the standard of care expected of them when exercising their duties and discretion.
What is the duty to act unanimously?
If there is more than 1 trustee then when carrying out their duties, all trustees must act unanimously when exercising their discretion.
What is the duty to act personally?
Trustees must not delegtae decision making powers
What can a trustee delegate?
1.purley administartive functions - eg the preparation of tax accounts
2. Investment decisions in some cases
3. All their duties and functions if they execute a power of attorney for a fixed term up to 12 months.
What is the duty to take possession of trust property?
Must ensure that the trust property is in their joint possession and control - should not be in the control of just one trustee as if it is stolen then all trustees are liable.
What is the duty to keep accounts and disclose information?
Trustees must keep accounts and records and produce them and send them to the ebenficiaries when requested.
What is the duty to act impartially?
Must act impartially between the beneficiaries unless the trust deed states otherwise
Eg if there are two beneficiaries, one with a right to income and one with a right to capital - they must ensure the property is income producing and does not decrease in value.
What is the duty of confidentiality?
Must keep information obtained in the course of the trust confidential
What is the duty to invest?
Must invest the funds to produce an income.
What happens to the fees recieved for being a trustee?
The payment paid to the trustee will be held on a constructive trust for the beneficiaries.
What happens to the fees gained as by the trustee being a director for a comnpany?
The fees gained will be held under a constructive trust for the benficiaries
What happens if a trustee makes a profit from information or an opportunity recievened as a trustee?
The profit they made will be held on constructive trust for the benficiaries.
Can a trustee charge for their services
No cannot charge a fee for their trustee services
Can a trustees out of pocket expenses be recovered eg travel related to the trust
Yes.
When can a trustee charge for their services?
- Charging clause in the trust deed permitting them to charge a fee
- They are professional trustees
- They are a trust corporation
- All the ebenficiaries are over 18 and have full capcity they can allow a agree to let a trustee recieve payment.
- The court authorises payment
What is the rule on self dealing?
The trustee cannot purchase property that is owned by the trust and any purchase is voidable by the ebneficiaries.
When may the court allow self dealing?
If the trustee was open and honest about the self dealing and the self dealing benefitted the beneficiaries it MAY be allowed.
What must a trustee show in order for a purchase of trust property not to be void
- They paid a fair price for the beneficial interest
- Made full disclosure of all the facts to the beneficiary
- They have not abused their position.
What is the statutory duty of care?
The trustee must exercise such care and skill as is reasonable in the circumstances having regard to:
1. Any special knowledge or experience that the trustee has
And
2. If he acts in the course of a business or profession, to any special knowledge or experience that is reasonable to expect a person acting in the course of that kind of business or profession to have.
