Fiduciary duties Flashcards
What is a fiduciary?
Someone who has opted to act for or on behalf of another on a matter in circumstances which give rise to trust and confidence.
What is the core fiduciary duty for trustees?
A trustee must not put themselves in a position where their own interests conflict with the interests of the trust.
What is the liability of a trustee for a breach of fiduciary duty?
Strict liability.
They must account to the trust even if they thought they were doing the right thing or had offered the opportunity to the trust first.
Where can a trustee keep personal profits?
They are authorised by the declaration of trust
The trusts gave full disclosure to the adult beneficiaries who consent
Authorised by a court order or statute
What types of breaches of fiduciary duty can there be? (6)
Self-dealing property from the trust
Competing with the trust’s business
Trustee remuneration without authorisation
Receiving commission from trust business
Receiving salary from a directorship from shares owned by the trust
Failure to passing opportunities on to the trust, or taking advantage of the opportunity themselves
What can beneficiaries do in the event that a trustee purchases property from the trust?
Given the conflict, beneficiaries can set this transaction aside within a reasonable amount of time.
Time does not run against beneficiaries under 18 or those whose interests are postponed under life interests.
When can a professional trustee be paid for their services?
In the absence of a clause in the declaration, they can rely on statute.
TA 2000 states that they can be paid for their services provided the other trustees agree in writing.
A sole professional trustee is not entitled to statutory remuneration.
Can non-professional trustees be paid for their services?
Only with beneficiary consent or court authorisation.
What must a trustee do if they receive a salary from a directorship in a company owned by the trust?
They must pay their salary to the trust, unless they were a director before the trustee had shares in the company.
What are the causes of action for breach of fiduciary duty?
The trust can choose to assert personal or proprietary remedies against the trustee.
