Trustees Powers And Duties

Question 1

Buttle v Saunders

Answer 1

1950, Duty to Act in Best financial interest regardless of morals

Question 2

Turner v Turner

Answer 2

1984 - acting in excess of powers could be breach of duty

Question 3

Re Wragg 1919

Answer 3

Duty to Invest (old definition- income production) new definition in Harries v CC

Question 4

Harries v CC

Answer 4

1992 - duty of investment

• Income or Capital growth

Question 5

Re Power

Answer 5

1947 - Rent Free use of property, power to acquire land

Question 6

Nestle v Natwest 1996

Answer 6

Modern Trustees entitled to be judged by standard of current portfolio theory (risk of entire portfolio, not individual risk in isolation)

Question 7

Cowan v Scargill

Answer 7

1985- best interest of beneficiaries regardless of ethical considerations (unless provided for in trust instrument)

Question 8

Re Vickery

Answer 8

1931 - express clause providing for delegation

Question 9

Pilkington v IRC

Answer 9

1964 - duty of care of powers of maintenance and advancement

Question 10

Speight v Gaunt

Answer 10

1883 - must act as prudent man of business as if own affairs

Question 11

What statutes deal with Maintenance and Advancement (2)

Answer 11

Trustees Act 1925

amended by

Inheritance and Trustees Powers Act 2014

Question 12

Maintenance is used to distribute what?

Answer 12

Income eg) Dividends or Interest

Question 13

Advancement is used to distribute what?

Answer 13

Capital

Question 14

Trustees Duty?

Answer 14

Buttle v Saunders 1950 - best financial interests

Question 15

Appointment of Trustees

Answer 15

S.36 TA 1925
- must be in writing

Question 16

S.41 TA 1925

Answer 16

Public Trustee, court appointed trustee
A trust will not fail for want of a trustee

Question 17

Removal of T

Answer 17

S.39 TA 1925
- min 2 left, at same time as appointment (or if absent or unfit)

Question 18

S.40 TA 1925

Answer 18

Deed must be drawn out appointing new trustee then property will automatically vest (but shares / land need proper transfer)

Question 19

Payment of a trustee?

Answer 19

S.29 - professionals trustee payment ‘reasonable remuneration’
S.31 - expenses can be paid (travel / legal fees)

Question 20

Investment

Answer 20

• duty Re Wragg (1919) income production & Trustees Investment Act 1961 OLD

S.3 TA 2000 replaces & clarifies this
Harries v CC 1992 “income / capital growth’

Question 21

S.6 TA 2000

Answer 21

General power of investment (s.3) may be extended, restricted or excluded by trust instrument. Applies to all trusts even before Act (s.7)

Question 22

S.8 TA 2000

Answer 22

Ts have power to acquire land in uk as investment / occupation by ben
Can by modified by settlor (s.9)

Question 23

DUTY OF CARE

Answer 23

S.1 TA 2000
Dual Test
(1) special knowledge he holds himself to
(2) course of business special knowledge reasonable to expect

Question 24

S.4 TA 2000

Answer 24

T must have regard for standard investment criteria
- diversification, suitability, duty to review

Question 25

S.5 TA 2000

Answer 25

Duty to obtain & consider advice on investment unless they consider reasonably unnecessary

Question 26

S.19 TA 2000

Answer 26

anyone giving advice must be regulated

Question 27

S.11 TA 2000

Answer 27

May now delegate asset management functions (can’t delegate power to distribute funds)

Question 28

Who can’t be appointed

Answer 28

Beneficiary

Question 29

Appointments of agent & being paid

Answer 29

S.12 2000 S.14 2000 - allows payment of agent

Question 30

S.16 TA 2000

Answer 30

Permits appointment of nominee S.19 restricts this

Question 31

S.17 TA 2000

Answer 31

Permits appointment of custodian S.19 restricts this

Question 32

Duty to review Delgation

Answer 32

S.22