6.4: Trustees And Fiduciary Obligations Flashcards
No conflict rule
Fiduciary (trustee) must not put themselves in a position of actual or potential conflict between their duty and own interest
No self dealing
Cannot sell trust property to themselves as a trustee
Fair dealing
Trustees cannot purchase any of the beneficial interest from the beneficiaries unless certain requirements are fulfilled
No profit rule
Requires that a trustee does not make a personal profit from their position as a fiduciary. Remedy is an account of the profits to the beneficiaries
Exceptions to the no-profit rule
Court authorises
Beneficiaries authorise payment
Solicitor-trustee involved in litigation can be remunerated
Trust deed contains a charging clause allowing for trustee remuneration
Sui juris
Of age
Maximum and maximum number of trustees?
No minimum or maximum number of trustees
In land there can only be X number of trustees
2 & 4 - first four named trustees. Legal ownership of land is limited to a maximum of 4 persons at a time
Minimum number of trustees in land
2
Because trustees hold legal title and cannot give a valid receipt to the purchaser if there is just 1
A trustee can be replaced when they spend X amount of time outside of the UK
12 months for a continuous period or more
If a trustee wishes to retire without a new trustee being appointed they must
Do so by deed
Have the consent of their co-trustees
So long as after they retire there is a trust corporation or at least two people to act as trustees
Court has an inherent power to remove trustees who
Take up residence abroad
Becomes bankrupt
Behaves improperly
Unfit to act
Beneficiaries are entitled to
Information about the trust and can inspect trust documents but they are not entitled to trustees discussions
When investing trustees are under an obligation to
Seek expert advice on the investment
