Trustees Act 2000

Question 1

What is the Trustees Act 2000?

Answer 1

1. The Trustee Act 2000 gives trustees the power to make any type of investment, including land and property.
2. Trustees must follow investment criteria and take proper advice before making decisions.
3. The investment criteria is:
   A. The Suitability to the trust of an investment. (Is it appropriate?)
   B. The Need to diversify investments as appropriate for the circumstances of the trust.
4. I trust you must review the investments of the trust, and obtain and consider proper advice about whether the investments should be varied
5. The Act DOES NOT APPLY to occupational pension schemes, authorized unit trusts, or certain charitable schemes under the Charities Act 2011.

Question 2

What are the key duties and powers of a trustee?

Answer 2

1. Invest in the Trust Fund
   A. Property in the fund is called the trust fund
   B. Trustees must ensure the trust assets are invested properly until they are distributed to beneficiaries.
   C. If the only property in the trust is only an insurance plan then, there will be no fund to invest until after any claim on the insurance plan.
2. Act Impartially
   If there are multiple beneficiaries then, trustees must treat them fairly and not favor one over another.
3. Take Appropriate Advice
   Trustees should take professional investment advice when investing unless:
   A. The fund is too small to justify the cost, or,
   B. A trustee is already qualified to give investment advice.
   C. Trustees can ask a professional person to act on their behalf in investing the fund, but responsibility for the investment would still lie with the trustee.
4. Distribute the Trust Property
   Trustees must ensure assets are passed to beneficiaries at the right time.
5. Keep the Trust’s Property Secure
   Trustees must protect trust assets, e.g., ensuring a house owned by the trust is properly insured.
6. Keep Proper Records
   Trustees must document and keep records all decisions and actions they take:
   A. Investments they make
   B. Money they pay out to a beneficiary.
   C. Advice they have taken. (From other professionals)
   D. Costs that the trust had to pay.