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Running a trust Flashcards

1
Q

Which Section of which Act gives trustees the power to appoint new trustees?

A

Section 36 Trustee Act 1925

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2
Q

Trustees may appoint a new trustee n substitution of an old trustee. Which section of which Act?

A

Section 36(1) Trustee Act 1925

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3
Q

Trustees may appoint additional trustees. Which Section of which Act?

A

Section 36(6) Trustee Act 1925

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4
Q

Which Section of which Act automatically vests the property of the trust with the trustees?

A

Section 40 Trustees Act 1925

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5
Q

The Court can appoint new trustees. Which Section of which Act?

A

Section 41 Trustee Act 1925

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6
Q

A trustee can retire without replacement if there are at least 2 trustees remaining. Which section of which Act?

A

Section 39 Trustee Act 1925

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7
Q

Beneficiaries can remove and appoint trustees by writing if they are sui juris. Which Section of which Act?

A

Section 19 TLATA

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8
Q

Trustees have a duty to invest trust property. Which section of which Act?

A

Trustee Act 2000

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9
Q

What is the definition of an “investment”? Which case?

A

Something designed to produce income and/or capital growth. Harries v Church of England Commissioners

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10
Q

An unsecured loan is not an investment. Which case?

A

Khoo Tech Keong

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11
Q

Trustees have a duty to act in the best financial interests of beneficiaries. Which case?

A

Cowan v Scargill

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12
Q

Trustees can make any investment as if they were absolutely entitled. Which Section of which Act?

A

Section 3 Trustee Act 2000

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13
Q

A trustee will only be liable for a breach of duty if the gain made is “less than the gain that a reasonable man would make”. Which case?

A

Nestle v Nat West

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14
Q

A trustee will only be liable if the investment decision was one which “no reasonable trustee” would take. Which case?

A

Wight v Olswang

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15
Q

What is the standard of care for investment decisions?

A

Section 1 Trustee Act 2000 “Such care and skill as is reasonable in the circumstances”.

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16
Q

What is the standard of care for ordinary trust decisions? Which case?

A

Speight v Gaunt- “such care as the ordinary man of business would conduct his own affairs”.

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17
Q

Trustees must have regard to the suitability and diversification of trust investments. Which Section of which Act?

A

Section 4 Trustee Act 2000

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18
Q

Trustees must obtain and consider advice. Which Section of which Act?

A

Section 5 Trustee Act 2000

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19
Q

Trustees can delegate some functions to agents. Which section of which Act?

A

Section 11 Trustee Act 2000

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20
Q

Trustees must review the performance of agents. Which section of which Act?

A

Section 22 Trustee Act 2000

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21
Q

Trustees can pay agents reasonable remuneration out of trust funds. Which section of which act?

A

Section 32 Trustee Act 2000

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22
Q

Trustees are not vicariously liable for their agents breaches. Which Section of which Act?

A

Section 32 Trustee Act 2000

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23
Q

Trustees may individually delegate by giving a power of attorney to another. Which section of which Act?

A

Section 25 Trustee Act 1925

24
Q

Trustees can’t be forced to exercise powers. Which case?

A

Re Brockbank

25
Q

Trustees have the power of advancement under which Section of which Act?

A

Section 32 Trustee Act 1925

26
Q

What are the conditions that must be fulfilled for advancement to take place?

A
  1. Does not exceed half of B’s share
  2. No one has a prior interest
  3. It must be for the benefit of B’s material situation
27
Q

In which case was advancement to a beneficiary used inappropriately by their parents?

A

Re Pauling’s Settlement

28
Q

If B is under 18 T can pay the whole or part of trust income to his parents or towards his maintenance or benefit if there are no prior interests. Which Section of which Act?

A

Section 31 Trustee Act 1925

29
Q

The Court may intervene if the acts of trustees are “improper”. Which case?

30
Q

The court may intervene if trustees act capriciously. Which case?

A

Re Manisty’s Settlement

31
Q

Beneficiaries can demand to see trust documents. Which case?

32
Q

Trustees deliberations are confidential. Which case?

A

Re Londonderry’s Settlement

33
Q

Where an object had a legitimate expectation they may be able to see trustee’s reasoning. Which case?

A

Scott v National Trust

34
Q

According to which Act can Courts consent for those who cannot consent for themselves?

A

Variation of Trustees Act 1958

35
Q

According to which case is it found that variation of the trust under the Variation of Trusts Act 1958 is permitted but a complete resettlement is not?

A

Re Ball’s Settlement

36
Q

A person in a fiduciary duty has a duty not to put himself in a position where his personal interests and his duties conflict. Which case?

A

Bray v Ford

37
Q

What are the 5 types of activity that trustees are prohibited from?

A
  1. Purchasing from the trust
  2. Competing with the trust
  3. Unauthorized remuneration
  4. Incidental profits
  5. Breaking a duty as a company director
38
Q

There is strict liability where trustees purchase from the trust. Which case?

A

Ex P Lacey

39
Q

The strict liability rule against purchasing from a beneficiary can be rebutted in which way?

A

The “fair dealing” rule:

  1. Disclose all facts
  2. Transaction is fair
  3. No undue influence
40
Q

Where a trust contains a business, trustees must not compete with that business. Which case?

A

Bray v Ford

41
Q

In which ways can trustees be remunerated?

A
  1. If the beneficiaries consent sui juris

2. Under the conditions laid out in the Trustees Act 2000 at ss28-31

42
Q

Trustees must not receive remuneration from a third party for being a trustee. Which case?

A

Williams v Barton

43
Q

Trustees must not buy freehold or leasehold from the trust. Which case?

A

Keech v Sandford

44
Q

Trustees must not use the information from the trust for their own opportunities. Which case?

A

Boardman v Phipps

45
Q

Strict liability as to competing with the trust applies to company directors. Which case?

A

Regal Hastings v Gulliver

46
Q

Which Section of which Act sets out the fiduciary duties of company directors?

A

Section 175 Companies Act 2006

47
Q

If a trustee has received the sui juris consent of all beneficiaries they will have a defence. True or false

48
Q

A proprietary claim against a trustee is only possible where the profit was gained out of trust property or out of an opportunity belonging to the trust. Which case?

A

Sinclair Investments

49
Q

Trustees have a duty to watch over the conduct of fellow trustees. Which case?

A

Styles v Guy

50
Q

Trustees are only liable if their breach caused loss. Which case?

A

Nestle v Natwest

51
Q

If a breach caused loss and profit, beneficiaries can keep the profit and sue for loss- unless they arose from the same breach. What case?

A

Bartlett v Barclay

52
Q

If trustees had knowledge and consent of sui juris beneficiaries they will not be liable. Which case?

A

Re Paulings Settlement

53
Q

Trustees may be relieved of liability if they have acted honestly and reasonably. Which section of which Act?

A

Section 61 Trustee Act 1925

54
Q

There is a statute of limitations of 6 years for bring a personal claim against a trustee. Which section of which Act?

A

Section 21(3) Limitation Act 1980

55
Q

There is no time limit for proprietary claims. Which section of which Act?

A

Section 21(1) Limitation Act 1980

56
Q

Trustees are jointly and severally liable. True or false?

57
Q

Trustee’s contributions can be assessed in connection with which act?

A

Section 2 of the Civil Liability (Contribution) Act 1978

Equity (7 decks)

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