Trustees' Duties

Question 1

What is the roll of a trustee?

Answer 1

To hold legal ownership and and manage the trust

Question 2

How can a trustee be appointed ?

Answer 2

By the court. Or under the provision of section 36 of the Trustees Act 1925.

Question 3

A duty to invest trust money falls under which act?

Answer 3

Trustee Act 2000
S.3. “A trustee may make any kind of investment providing he has absolute entitlement to the assets of the trust”

S.4. (1) must have regard for the standard investment criteria
S.4. (3)(a) suitability to the trust of the type of investment
(b) the need for diversification
S.4. (2) the trustee must review the investment from time to time

Question 4

Trustee Act 2000: S.5 and S.5(4)

Answer 4

S.5. Trustee must seek advice before investing.

S.5(4) proper advice from a qualified person.

S.5(3) However is exception from the advice requirement is the trustee “reasonably concludes that in all circumstances” it is unnecessary or inappropriate

Question 5

Cam trustee be liable for errors?

Answer 5

Yer but only if the conduct falls below the standard of care.

Question 6

What is the standard of care laid out in Nestle v National Westminster Bank Plc [1993]?

Answer 6

Judgement of an investment by a trustee will be based on preservation of the trust fund as oppose to its successes.

Question 7

Cam trustees adopt a non-financial investment?

Answer 7

Yes they could however, the interest of the beneficiaries must always be put first.

Question 8

What case sets the precedent for non-financial investments ?

Answer 8

Cowan v Scargill [1985]; the interest of the beneficiaries must always be put first.

Question 9

What is the case that defines “invest” ?

Answer 9

Re Wragg [1919] - to employ money in the purchase of anything from which interest or profit is expected.