Trust 12 - Fiduciary relationship Flashcards

1
Q

What types of duties do trustees owe?

A
  • Trustee duties (e.g. comply with trust terms, reasonable care and skill)
  • Fiduciary duties (no conflict, benefit)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are the 2 fiduciary duties trustees owe?

A
  • No Conflict
  • No Profit
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is the no-profit rule and remedies for breach?

A

Won’t be able to retain profit: either
- account for profits (personal claim) or
- constructive trust imposed (proprietary claim)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is self-dealing and its effect?

A
  • Trustees shouldn’t purchase trust property from trust or sell assets to trust as it’s breach of no-conflict rule
  • Transaction = voidable
  • For company in which they hold shares, if they have a controlling shareholding, can be seen as self-dealing, if not, not self-dealing but still breach of no conflict
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

how can a trustee avoid liability for fair-dealing?

A

Fair Dealing = trustee buying beneficial interest off beneficiary

Voidable unless:

  • full disclosure
  • acted honestly and fairly
  • did not take advantage of B
  • get fully informed consent from principals (settlor)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are the consequences if breach of no-conflict rule?

A

Transaction = voidable
If it causes loss, can be sued personally
If principal profits from breach, can’t obtain a remedy, but if fiduciary also profits, they can recover this

How well did you know this?
1
Not at all
2
3
4
5
Perfectly