TYPES OF HOME INSURANCEMarch 19, 2019
INTERIOR DESIGN AND DECOR TRENDSMarch 19, 2019
All the powers of a trustee are ‘fiduciary’, which means that they must be exercised as follows:
- in the best interests of all the beneficiaries;
- only for the benefit of the beneficiaries and not for third parties;
- not for the trustees’ benefit, unless specifically authorised; and
- not to defeat the terms of the trust, but in compliance with them and in consideration of all other relevant circumstances.
A trustee owes a duty of honesty, integrity, loyalty and good faith to the beneficiaries of the trust. A trustee must at all times act exclusively in the best interests of the trust and be actively involved in any decisions. Prior to accepting the position of trustee, a potential trustee must ensure that:
- there is no conflict of interest between his or her own personal circumstances and those of the beneficiaries;
- they have read and understood the trust deed;
- they understand the nature of the beneficial interests and as much about the beneficiary’s personal circumstances as will be necessary to administer the trust;
- they are satisfied there are no outstanding breaches of trust by the existing trustees; and
- they have determined the extent of the trust property and will ensure that, once appointed, it is vested in the names of the new trustees.
General Duties of a Trustee:
- To always act in good faith and jointly – the common law rule is that the trustees must always act jointly in a transaction with third parties and contractual powers must be exercised by all the trustees acting together.
- To observe the trust deed – trustees must inform themselves of the terms of the trust deed and comply strictly with the duties and directions set out in therein.
- To take possession of the trust property – the trustee needs to take charge of the trust property and he must, as soon as possible, acquaint himself with the nature and extent of thereof and take possession of the property so that it comes under his/her control.
- To act independently between the beneficiaries – trustees must not allow one beneficiary to suffer at the expense of another and must balance potentially competing interests for income and capital.
- To provide information – trustees are under a duty to provide clear and accurate accounts and produce any information or other documents relating to the trust when required to do so by a beneficiary.
- To act unanimously.
- To exercise reasonable care and ensure the correct distribution of assets.
- To provide an income for the beneficiaries and to preserve the value of the capital.
The precise powers that a trustee has will be defined by the trust deed and by law. However, a trustee will normally be given the following powers:
- dealing with land;
- delegation to agents, nominees and custodians;
- remuneration for professional trustees;
- advancement of capital;
- maintenance of minor beneficiaries; and
- to pay, transfer or lend funds to beneficiaries.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. (E&OE)