Head 18: Duties of Trust Flashcards
What is the basic duties of trustees?
Basic duty of trustees is to administer the trust properly. They must invest the trust funds in a reasonable manner. The investments must be both “authorised” i.e. within their powers and ‘proper’.
This duty is given greater specification by T(S)A 1921, s4A. The Trustee must have regard to the possibility that ‘diversification’ of investments may be in the best interests of the beneficiaires.
What is the duty of care owed by the trustees?
Their duty of care, to act solely in the interests of the beneficiaries and not to act outwith their powers are dealt with under Head 19 (Breach of Trust).
In what name should trustees hold trust property?
Trustees should hold trust property in their names as trustees.
But trustees can use nominees for holding investments, s 4B Trusts (Scotland) Act 1921.
Ferguson v Paterson (1898) 25R 697
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Tibbert v McColl 1994 SLT 1227.
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What is the beneficiary entitled to know about the trust?
Trustees should tell each beneficiary of existence of trust, their interest in it and contact details for the trustees.
Scottish Law Commission, Report on Trusts, Scot Law Com No 239, (2014), Chap 11.
What documents are beneficiaries entitled to see?
Beneficiaries entitled to see trust deed, trust accounts and vouchers.
So this means Trustees must keep accounts and retain the ‘vouchers’ (relevant documents such as receipts). It is unclear how long they have to keep records.
Tod’s Trs (1842) 4D 1275
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Nouillan v Nouillan’s Exs 1991 SLT 270
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Leitch v Leitch 1927 SC 823.
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Can beneficiaries see minutes of trustee meetings etc?
Not generally entitled to see minutes of trustees’ meetings, any record of their deliberations or letters of wishes by trusters, but court may order disclosure.
What are the fiduciary duties of the trustees?
Fiduciary duties — trustees must adhere to the terms of the trust deed and to general trust law. A trustee must not be an auctor in rem suam or buy from the trust or sell to the trust or borrow or lend or in any way deal with the trust in his or her personal capacity.
