Rights & Duties in Trusts

Question 1

What is dual patrimony theory?

Answer 1

Developed by Gretton. Really useful concept, advocated by courts on two occasions, SLC, Smith article etc.

Everyone has their own personal patrimony but also trust patrimony
Explains real subrogation and why assets of trust not subject to diligence by personal creditors of trustees & generally not vulnerable to closing by creditors

Question 2

Duties of trustees to beneficiaries

Answer 2

Duty to use trust only for purposes set out in trust deed
Trustee must always put trust interests before his own, fiduciary nature
Duty to disgorge any personal gains
Duty not to do anything contrary to trust purposes

Question 3

Rights of beneficiaries against trustees

Answer 3

Right to compel trustees to administer trust according to its terms
Right to interdict
Right to recover damages
Right to petition court to replace trustees
Bring action for count, reckoning and payment

Question 4

England and Wales

Answer 4

Dual ownership. Real right and beneficial / equitable right. Unititular not an ish here. Trustees bear obligations personally
Beneficiaries are dispensable and can be added or removed
Estate of deceased is like a trust

Question 5

Romania

Answer 5

Similar to Scotland in that there in a single patrimony, divided into 2 parts

Question 6

South Africa

Answer 6

Administrator only

Bewind trusts also

Question 7

Quebec

Answer 7

Trustee is manager and administrator. Property ownerless and trust is a legal person

Question 8

Hague Convention

Answer 8

Dual patrimony too

Question 9

Should trusts have separate legal personality?

Answer 9

Avoids issue of where liability is personal, always against trust, rather than trustees!
Don’t need to know who the owner is

But
You can also explain these issues away with dual patrimony
Trustees remains owner and liabilities only against trust patrimony

Would also require overhaul of law, disadvantages outweigh
Works fine the way it is

Question 10

Adv of making trustees owners rather than agents or managers?

Answer 10

They can transfer property, carry out authorised transactions etc
Scots law does not like ownerless property
Administrators would have less power

Question 11

Development of discussion as to who owned trust property

Answer 11

Stair - trustees as owners, beneficiaries had a right but not ownership

Beneficiaries also owners? Lord Maclaren in Heritable Reversionary v Miller brought this into doubt. Also Sharp v Thomson suggested

Inland Revenue v Clark’s Trustees - right of beneficiary is nothing more than a personal right to sue the trustees and compel them to administer the trust