C12 - The Parties Of A Trust

Question 1

Dummy settlers

Answer 1

Disguise settlor

Friend/relative make initial amount

Question 2

Trustee duties

Answer 2

Special knowledge or experience that trustee has

Any special knowledge or experience that one would reasonably expect the person to have

Care and skill

Question 3

Imperfect gifts

Answer 3

Settlor tries to transfer assets to a trustee but retain some control over assets

Question 4

Number of trusts

Answer 4

Usually set out as a requirement in the trust deed

Laws of jurisdiction may require that there are a minimum Number of trustees

Question 5

Characteristics that many potential settlers will desire from their trustee:

Answer 5

Regulated and supervised
Qualified and experienced 
Size of organisation should be suitable for client
Fees and charges levied 
Good level of customer service
Talented and experienced staff

Question 6

Blind trusts

Answer 6

Trust instrument is created with only a well known charity identified as beneficiary

Question 7

Rights of beneficiaries

Answer 7

Benefit that beneficiary is entitiled to depends on type of trust

With discretionary trust - trustee has discretionary power to decide whether or not beneficiary will benefit

Fixed interest - (life tenant of a life interest trust) the trustee may not have power to vary beneficiarys interst

Beneficiary has interest - absolutely entitles to, referred to as vested interest

Question 8

Protector

Powers

Answer 8

Remove the trustee
Appoint a new trustee
Obtain information about the trust fund
Consent to the remuneration of the trustee

Question 9

Enforcer

Answer 9

Person appointed to a non-charitable purpose trust

Duty of enforcer to enforce trust in relation to non-charitable purpose

All
Non-charitable purpose true must have an enforcer at all times