Trustees powers and duties: Administrative powers

Question 1

Where are the trustees powers an duties included?

Answer 1

1. trust instrument
2. Statute
   Trustee Act 1925
   Trustee Act 2000

Question 2

What is the difference between administrative and dispositive powers and duties?

Answer 2

1. Administrative powers and duties, which relate to the management of the trust property while it is held on trust.
2. Dispositive (or ‘distributive’) powers and duties, which relate to the distribution of trust property in accordance with its terms

Question 3

What are administrative powers?

Answer 3

Trust instruments will usually contain express administrative powers (buy, sell, invest, delegation) but, if not, there are default powers in TA 2000.

Question 4

What are the three types of administrative powers?

Answer 4

• General power of investment
• Power to acquire land
• Power of delegation

Question 5

Administrative powers: What is the general power of investment?

Answer 5

a trustee may make any kind of investment that they could make if they were absolutely entitled to the assets of the trusts while..

• Considering the standard investment criteria set out in s 4 TA 2000 (standard investment criteria ; a suitable and diversified investment)
• Take advice in accordance with s 5 TA 2000 - from someone who is qualified to give it.

Question 6

Administrative powers: What is power of acquisition of land?

Answer 6

Trustees have a statutory power to acquire freehold or leasehold land in the UK (but not overseas).

This power may be exercised for investment purposes but also more widely (including for occupation by a beneficiary).

Question 7

Administrative powers: What is power of delegation?

Answer 7

Trustees are permitted to delegate their powers of investment and powers
to acquire land.
- In writing complying with a written policy statement.

There are restrictions on the persons to whom powers may be delegated (beneficiaries, minors etc..)

Question 8

What is the duty of care of the trustees?

Answer 8

1. Statutory duty of care s1 TA 2000 - higher standard held for professional trustees.
2. Common Law duty: standard of diligence and care expected from an ordinary prudent business person.