Ch 10 - Trustee Duties - Investment Flashcards
What is the trustee’s duty regarding investment?
Trustees must invest trust property to maintain or grow the trust’s value, preventing loss from inflation.
What should trustees do if there are express provisions in the trust regarding investment?
Trustees must follow the express provisions outlined in the trust declaration.
What legal framework applies if there are no express provisions in the trust regarding investment?
The Trustee Act 2000 applies in the absence of express provisions.
What types of investments can trustees make?
Trustees can make authorized investments and acquire land in the UK but not overseas unless specified in the trust.
What should trustees consider when reviewing investments?
Trustees should consider the suitability of investments, risks, return (income or capital), and diversification.
How often should trustees review investments?
Trustees must periodically review investments, with the timing based on the specific circumstances of each case.
When should trustees seek investment advice?
Trustees should seek advice from qualified professionals unless they themselves are suitably qualified to make investment decisions.
What standard of care must trustees exercise when managing investments?
Trustees must exercise reasonable care and skill, with a higher standard required for professional trustees.
How must trustees act regarding the interests of beneficiaries?
Trustees must act impartially and seek the best financial return for beneficiaries, prioritizing financial considerations over personal or ethical views (except in charity trusts).
Can trustees delegate investment decisions to third parties?
Yes, trustees can delegate investment decisions to qualified third parties, ensuring proper procedures and regular reviews of the agent’s performance.
Are trustees liable for losses caused by an investment agent?
Trustees are not vicariously liable for losses caused by an investment agent, as long as the agent is properly selected and monitored.
