Trustee Supervision

Question 1

T duties/powers

Answer 1

1. Loyalty
2. Inform and account
3. Prudent investment (care)
4. Collected and protect
5. Earmark (no commingle)
6. Bring and defend claims
7. impartiality
8. Power of Ts
9. Exculpatory clause
10. Remedies for breach

LIPCEBIPER

Question 2

T’s duty of loyalty

Answer 2

1. Put B’s interests first;
2. Conflict of interest - good faith, objectively reasonable;
3. Self-dealing - no further inquiry;
4. Except when court approval or unanimous Bs;
5. Remedies favorable to deter.

BICIGO-SIFECUR (B’s Interests Conflict Interest Good Objective - Self Inquiry Further Except Court Unanimous Remedies)

Question 3

T’s duty of care / prudent investment

Answer 3

1. Reasonable person managing their own property;
2. preserve principal historically;
3. prudent investor modernly;
4. Risk/reward, inflation, diversification, B needs;
5. Deference to settlor not absolute;
6. No delegation at common law;
7. Select, instruct, and monitor modernly.

ROPHIM-RIDDACSIM

Question 4

T’s duty to inform and account

Answer 4

1. B’s must be informed of Existence;
2. Provided with copy of trust instrument;
3. Major changes;
4. Annual accounting;
5. Accurate records;
6. Withhold okay but
7. Enough information to protect.

BETIMARWIP

Question 5

T’s duty to collect and protect trust property

Answer 5

1. Secure and protect
2. insurance
3. taxes, mortgage, maintenance;
4. intentional failure, breach of loyalty.

SITIF

Question 6

T’s duty to earmark property

Answer 6

1. Separate from their own
2. Titled accounts
3. adequate internal records;
4. not commingle
5. egregious breach must show causation

SOTARCEC

Question 7

T’s duty to bring and defend claims

Answer 7

1. Defend Res
2. valid legal claim is res
3. Bs can bring derivative claim for failure by T.

DVCD (Defend Valid Claim Derivative)

Question 8

Trustee powers

Answer 8

1. Powers of Unmarried Person;
2. follow Wishes of Settlor; but
3. Co-Trustees minded.

PUP-WoSC (Power Unmarried Person Wishes of Settlor Co-Trustees)

Question 9

Exclupatory clause

Answer 9

1. Strictly construed but allowed;
2. exceeding powers
3. grossly negligent
4. intentional
   SAPEGI

Question 10

B remedies for T breach of duty

Answer 10

1. Compensatory as if breach did not occur;
2. loyalty breach, favorable or punitive
3. Equitable - return of property, accounting, declaratory, removal if substantial breach.

CABOLFOPEDARRS

1. Compensatory (if breach didn’t occur);
2. Declaratory
3. Equitable
4. Loyalty Punitive

C-DELP