Trustee Liability MCQs Flashcards
A trust includes several valuable vintage sports cars. In breach of trust the trustee gives one of the sports cars to her girlfriend. The girlfriend is confused as the trustee has recently been complaining about how short of money she is. When the girlfriend asked where the car came from the trustee replies that this is a “perk of the job” and that “what you don’t know, won’t hurt you”. The girlfriend knew that the trust contained vintage cars but decided to ask no further questions and took the car out for a drive. She crashed the car and it is now worthless.
Which one of the following statements best describes the girlfriend’s liability to the beneficiaries?
The girlfriend had knowledge making it unconscionable for her to retain the car. The beneficiaries can make a personal claim against her for knowing receipt.
The girlfriend had knowledge making it unconscionable for her to retain the car but is not liable for knowing receipt because the car is now worthless.
The girlfriend is an innocent volunteer so the beneficiaries can make a personal claim against her for knowing receipt.
The girlfriend is an innocent volunteer but is not liable for knowing receipt because the car is now worthless.
The girlfriend is an innocent volunteer so is not personally liable to the beneficiaries.
The girlfriend had knowledge making it unconscionable for her to retain the car. The beneficiaries can make a personal claim against her for knowing receipt.
The girlfriend beneficially received the car. She has knowledge which would indicate the facts to a reasonable person and arguably ought to have made further enquiries. She is therefore likely to be liable for knowing receipt.
A man died one month ago leaving a will by which he appointed his friend as his sole executor.
The executor has not yet applied for a grant of probate. He wishes to protect himself against claims of unknown creditors and has decided to place advertisements in the London Gazette, a newspaper circulating in the district in which any land forming part of the estate is situated and any other newspaper or publication he considers might be appropriate.
Which of the following best describes how the executor can protect himself against claims from unknown creditors through advertising as above?
A. He should place the advertisements and must wait for two months from the date of the grant of probate before distributing the estate.
B. He should place the advertisements and must wait for two months from the date of the advertisements before distributing the estate.
C. He should place the advertisements and must wait for two months from the date of death before distributing the estate.
D. He should place the advertisements but must wait for two months from the date of death before doing so.
E. He should place the advertisements but must wait for two months from the date of the grant of probate before doing so.
B - He should place the advertisements and must wait for two months from the date of the advertisements before distributing the estate.
A woman died and was survived by her husband and son who is aged 30 years. Under the terms of her will, the woman created a trust fund of her residuary estate in the following terms:
“to pay the income from my residuary estate to my husband for the remainder of his life and after his death I GIVE my residuary estate to my son if he survives my husband and attains the age of 25 years but if he does not so survive then to my sister absolutely.”
The husband is discussing the possibility of bringing the trust to an end with the trustees.
Whose consent is required to bring the trust to an end now?
A. The husband and the son.
B. The husband, the son and the sister.
C. The husband and the sister.
D. The sister.
E. The son and the sister.
B - The husband, the son and the sister.
