Establishing and Managing a Trust Flashcards
In what instance can a person not be a trustee?
If they are a person of unsound mind
Who may additional trustees not be appointed by?
A minor beneficiary
Who may appoint additional trustees?
A person with the power to do so in the trust deed
The other trustees
The court
True or false, it is one of the duties of a trustee to not purchase trust property?
True
True or false, it is one of the duties of the trustee to act in the best interests of the settler?
False, the trustee is not under a duty to act in the settlor’s best interests, they must act in the interests of the trust and the beneficiaries
In what instance may a trustee not be remunerated for work done for the trust?
When the trustee is a lay person and there is no charging clause in the trust instrument - a trustee cannot be remunerated unless the trust instrument provides for it
What are the 3 conditions for an express private trust to be created?
Certainty as to subject matter, intention and objects
True or false, “I leave my estate to my wife on trust for our children” is imperative so as to create a trust?
True
What kind of property requires a declaration of trust to be evidenced in writing?
Land
When is constituting a trust completed on?
A trust is completely constituted when the legal title to the trust property is transferred to and vested in the trustees
Who may trustees not pay income of the trust to?
The remaindermen in a life interest trust - remaindermen’s interest is in capital only
Why can a minor beneficiary not appoint new trustees?
They are not sui juris - i.e. of age
True or false, professional trustees and trust corporations can be remunerated even if the trust instrument does not provide for such remuneration?
True
What is the perpetuity period for a trust?
125 years
True or false, trustees may not (unless permitted by the specific terms of the trust) advance capital to the life tenant?
The life tenant has an interest in income only, not capital, so the trustees cannot advance capital to the life tenant unless this is specifically permitted under the terms of the trust
Excluding trusts concerning land, what number of trustees may a trust have?
No minimum, no maximum
Hilda wishes to set up a trust that will own land. Can her sister, who is resident in Spain, be a trustee?
Yes
Mina acts as a trustee. What remuneration, if any, is Mina entitled to receive?
Reasonable remuneration
Thora was holding a flat on trust for Benedict. Thora has sold the flat, which the trust instrument did not permit her to do. Percy, who has bought the flat, had no idea it was being held on trust.
What action can Benedict take?
Benedict can claim damages from Thora
‘In the event of my death I would like to leave my rare painting collection in trust to my friends in the hope that they will enjoy them as much as I have done so over the years.’
Why is this trust likely to fail?
The trust is likely to fail as there is no certainty of subject matter nor certainty of objects
Clarence is drafting the deed to create an express private trust, the wording of which includes “something nice from my wine cellar for each of my children”.
What problem would there be with a trust deed drafted in this way?
Insufficient certainty of subject matter
When does a trust become completely constituted?
A trust becomes completely constituted when the legal title to the trust property is transferred to and vested in the trustees
