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E seminar- Trustees Duties (3)
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This is the final seminar prep of trustees duties with questions and answers.
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Duties of Trustees III:Trustee Act 2000:
s 11 – Power to employ agents
(1) Subject to the provisions of this Part, the trustees of a trust may authorise any person to
exercise any or all of their delegable functions as their agent.
(2) In the case of a trust other than a charitable trust, the trustees’ delegable functions
consist of any function other than—
o (a) any function relating to whether or in what way any assets of the trust should be
distributed,
o (b) any power to decide whether any fees or other payment due to be made out of the trust
funds should be made out of income or capital,
o (c) any power to appoint a person to be a trustee of the trust, or
o (d) any power conferred by any other enactment or the trust instrument which permits the
trustees to delegate any of their functions or to appoint a person to act as a nominee or
custodian.
(3) In the case of a charitable trust, the trustees’ delegable functions are—
o (a) any function consisting of carrying out a decision that the trustees have taken;
o (b) any function relating to the investment of assets subject to the trust (including, in the
case of land held as an investment, managing the land and creating or disposing of an
interest in the land);
o ( c) any function relating to the raising of funds for the trust otherwise than by means of
profits of a trade which is an integral part of carrying out the trust’s charitable purpose;
o (d) any other function prescribed by an order made by the Secretary of State.
(4) For the purposes of subsection (3)(c) a trade is an integral part of carrying out a trust’s
charitable purpose if, whether carried on in the United Kingdom or elsewhere, the profits
are applied solely to the purposes of the trust and either—
o (a) the trade is exercised in the course of the actual carrying out of a primary purpose of the
trust, or
o (b) the work in connection with the trade is mainly carried out by beneficiaries of the trust.
(5) The power to make an order under subsection (3)(d) is exercisable by statutory
instrument which shall be subject to annulment in pursuance of a resolution of either House
of Parliament.
s 12 – The right to occupy.
s 13 – persons who may act as agents.
s 14 – linked functions.
s 15 – Asset management: Special Restrictions
, (2)The trustees may not authorise a person to exercise any of their asset management functions as
their agent unless—
(a)they have prepared a statement that gives guidance as to how the functions should be exercised
(“a policy statement”), and
(b)the agreement under which the agent is to act includes a term to the effect that he will secure
compliance with—
(i)the policy statement, or
(ii)if the policy statement is revised or replaced under section 22, the revised or replacement policy
statement.
s 22 – Review of agents, nominees and custodians etc
s 23 – Liability for agents nominees and custodians etc
Trustee Act 1925:
s 31 – Trustees
s 32 – Power of advancement
George and Henry are trustees of a settlement created by Christine several years ago.
Thebeneficiaries are Christine, her husband Ezra, and their children, Alice (aged 3), Ben (aged
14),and Debra (aged 21). George and Henry are seeking advice from you on the lawfulness ofvarious
actions they want to undertake.Using the three hypothetical trust deeds provided, advice George
and Henry on the lawfulnessof the following proposed actions (bearing in mind the fundamental rule
that the defaultstatutory provisions apply wherever the trust deed is silent).1. The trustees wish to
appoint an agent for the purpose of identifying and purchasingsuitable real estate investments;2.
The trustees wish to appoint an agent for the purpose of advising them on the bestmethod of
distributing the trust fund to the beneficiaries;3. The trustees wish to use a portion of the trust fund
to pay Ben’s school fees;4. The trustees wish to advance a portion of the trust fund to Debra, as she
wishes topurchase a business for which she is fully trained;5. The trustees seek advice on what to do
with any income generated that is not spent onany of the above.
TRUST 1:
THIS SETTLEMENT is made the 14th day of September 2018
BETWEEN:
1. Christine Ann Moradi of 1 Lincoln Street, Lincoln LN1 AB5 (‘the Settlor’)and
2. George Williams of 30 Smith Street, Lincoln LN14 7AH and Henry Fitzwilliam of 7B Moon
Crescent, Lincoln LN11 7MA (‘the Trustees’)
WHEREAS
1. The Settlor wishes to make provision for herself and her family (‘the Beneficiaries’)
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