Running a Trust Flashcards
Appropriate Standard of Care - Such care that is prudent of a man of business
SPEIGHT v GAUNT
LEAROYD v WHITELY (business investment)
An investment is something expected to produce income and/or capital growth
HARRIES v CHURCH OF ENGLAND
An unsecured loan is not an investment
KHOO TEK KEONG
Beneficiaries can only recover compensation for loss if the gain made by the trust is less than the gain a reasonable man would have made
NESTLE v NATIONAL WESTMINSTER BANK
A trustee is not liable for an investment decision unless it is one which no reasonable trustee (similar knowledge and skill) would make
WIGHT v OLSWANG
Best Interest means Best Financial Interest
COWAN v SCARGILL
Trustees cannot delegate unless they have authority to do so
PILKINGTON
Performance is at the discretion of the trustees – Cannot be compelled by the Beneficiaries to exercise power
RE BROCKBANK
Once Beneficiaries have received an advancement of one-half of their share, the trustees cannot give them further advancement even if the trust fund increases in value
RE MARQUESS OF ABERGAVENNY’S ESTATE
Advancement = Any use of money which will improve the Beneficiary’s material situation
PILKINGTON
If there is a reason to suppose that the beneficiaries are unlikely to use the money for the purpose for which it was advanced, the trustees should apply the money directly to the purpose
RE PAULING’S SETTLEMENT TRUST
Discretion of Power - Court may intervene if ‘improper’
TEMPEST
Discretion of Power - Court may intervene if trustees merely do as a settlor tells them, rather than exercising their own discretion
TURNER v TURNER
Discretion of Power - Court may intervene if trustees act capriciously
RE MANISTY’S SETTLEMENT
Beneficiaries entitled to see trust documents, subject ot confidentiality
SCHMIDT
Reasons for Decision - Beneficiaries not entitled to see these
RE LONDONDERRY’S SETTLEMENT
Reasons for Decision - If trustees do state the reasons, Court may find the decision void if they deem them to be irrational
KLUG v KLUG
Reason for Decision - Where the Beneficiary had a legitimate expectation that discretion would be exercised in his favour and wasn’t (e.g.: income suddenly stopped)
SCOTT v NATIONAL TRUST
Variation of Beneficial Interest - SAUNDERS v VAUTIER
Beneficiaries can end trust is;
18+ and of sound mind
All beneficiaries agree
Are all in existence and ascertained, and absolutely entitled
Variation of Beneficial Interest - Immaterial whether variation is contrary to settlor’s wishes
GOULDING
Restrictions to Variation of Beneficial Interest - Court cannot consent for an adult ascertained beneficiary who is capable of consenting himself
KNOCKER
Trustees owe a duty to watch over and if necessary to correct the conduct of their co-trustees
STYLES v GUY
