Trusts Flashcards
Under what conditions may a trustee retire without replacement?
A trustee may retire without replacement if they leave two trustees or a trust corporation in office, and if their co-trustees consent by deed.
How do rules differ for trustees purchasing trust property versus a beneficiary’s interest?
Trustees cannot purchase trust property, but they may purchase a beneficiary’s interest.
For how long can trustees delegate their whole office by power of attorney?
For a continuous period of not more than 12 months.
When can trustees advance capital to a beneficiary?
When a beneficiary has an interest in the capital of a fund. Trustees must obtain consent from any prior income beneficiary.
What makes a trust of land enforceable?
There must be written evidence of the declaration of trust, signed by the settlor, and the transfer of trust must be by deed.
Can trustees charge for their services?
Trustees cannot profit unless there is an express power in the trust instrument. By statute, professional trustees may charge normal professional fees if they are not sole trustees and co-trustees consent in writing.
What happens if a trust divides assets between charitable and non-charitable objects?
The court can sever the charitable part and allow it to take effect.
When will courts divide money proportionately instead of applying the first-in, first-out rule?
When the rule contradicts the intentions of the claimants, it is impractical to apply the rule, or applying the rule would cause injustice.
What duty do trustees owe regarding beneficiary interests?
Trustees must act impartially and balance the differing interests of beneficiaries.
Does the statutory power to advance capital apply to all trusts?
It applies to fixed-interest trusts when a beneficiary has a vested or contingent interest in the capital. It does not apply to discretionary trusts.
What is joint and several liability?
When more than one trustee is in breach, they share joint and several liability.
Can trustees delegate discretion?
Generally, no, but they may exceptionally delegate their discretion to choose investments.
How many trustees are needed to give a valid receipt for a sale of trust land?
Two trustees are required.
How is title to chattels transferred in a trust?
By delivery or deed. If neither occurs, the trust is incompletely constituted.
What is the test of certainty of objects for a fixed-interest trust?
The complete list test: the trust fails if it is not possible to list all beneficiaries.
