Equity and Trusts - Running a Trust

Question 1

Investment is defined as something designed to product income and/or capital growth

Answer 1

Harries v Church of England Commissioners

Question 2

Best interest of beneficiaries = best financial interest

Answer 2

Cowan v Scargill

Question 3

Common law standard of care: reasonably prudent man of business conducting his own affairs

Answer 3

Speight v Gaunt

Question 4

Trustee can be sued under the statutory duty of care if the gains they make are lower than that which could be reasonably expected of a reasonable man of business

Answer 4

Nestle v NatWest Bank

Question 5

Trustee can be sued under the statutory duty of care if their investment decision was one no reasonable trustee with similar knowledge/ skill would take

Answer 5

Wight v Olswang

Question 6

Performance is at the discretion of trustees - they can’t be forced to exercise their power

Answer 6

Re Brockbank

Question 7

Advancement is defined as any use of money which would materially improve the beneficiary’s material situation

Answer 7

Pilkington v IRC

Question 8

Court may intervene if trustees merely do as settlor tells them instead of exercising their discretion

Answer 8

Turner v Turner

Question 9

Court may intervene if trustees act capriciously

Answer 9

Re Manisty’s Settlement

Question 10

Beneficiaries are entitled to see trust documents

Answer 10

Schmidt v Rosewood Trust

Question 11

Beneficiaries are not entitled to trustees deliberations/ reasons for decisions

Answer 11

Re Londonderry’s Settlement

Question 12

What is the rule in Saunders v Vautier?

Answer 12

Beneficiaries can end the trust if:
1- Sui Juris
2- All in agreement
3- All in existence, ascertained and absolutely entitled

Question 13

What allows the court to vary the trust on application if the beneficiary is under 18?

Answer 13

Variation of Trusts Act 1958 allows the court to consent to variation on behalf of those who cannot consent themselves, provided it is for the beneficiary’s benefit