Trustee act 2000 summary

Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who. Now there is a power in place giving trustees the ability to invest as if they were the absolute owners themselves. This is a much wider provision than was contained in previous legislation. Of course you may wish to restrict this power.

If so, the trust could be set up with a much narrower range of investment powers. Should a trustee review a trust document? Trustees have a legal requirement to understand and take into account this legislation. The act requires and imposes a Duty of Care on the trustees to legally ensure the trust arrangement is operated in a suitable way. The main provisions of this new legislation reflect the importance of the trust in commercial matters.

Stephen Pallister and Zoe Hooper-Smith look at its likely. There are certain duties a trustee must fulfil when exercising powers of investment in relation to a trust. See full list on moonbeever. If the trust assets are being transferred to the trustee in specie, the trustee should ensure that they are able to correctly identify the assets (via share certificates or other proof of ownership etc).

If there have been any breaches of the existing investment policy, these should be rectified as soon as possible. When considering the investment of the trust assets, a trustee must not unduly delay your investment decisions. Whilst a trustee may of course need to take some time to consider investment advice, it is likely that the trustee would be in breach of their duties if the trust fund were to languish for months without any action being taken. There is no statutory definition of what constitutes an unreasonable delay but it was held in Cann v Cann that six months was the maximum period for which income could reasonably remain un-invested. Whilst there is no formal requirement to do so, for good practice a trustee should endeavour to ensure that any advice which they seek in re.

If a trustee is to invest in property, he or she must also be careful to ascertain the appropriate purchase price for the property, that is, they must not pay above the market rate or appropriate valuation. Standard of behaviour required The standard of behaviour required is that of the “ordinary prudent man of business”. Whilst the role of trustee may seem at this point to be unduly onerous, it should be kept in mind that a trustee is entitle and indeed in some circumstances under a duty, to take professional advice. If a trustee appoints an advisor for the provision of investment advice and decisions, for example, and the trustee delegates to that advisor, then the trustee will not be liable for any act or default by that agent (unless they themselves are in breach of their duty of care) As a matter of good practice however, a trustee should consider carefully the appointment of any professional advisor so that he or she is satisfied that they have the appropriate knowledge and experience to advise.

The Act also places a duty on the trustee to obtain professional advice in connection with the nature and value of the trust fund. The Act makes fundamental changes in the manner in which trustees can and are expected to administer property subject to a trust. Current version: in force since. For the purpose of this briefing we assume that the trustees have this wide power of investment, although in practice it will be necessary to check the trust deed for any specific restrictions.

TRUSTEE EXEMPTION CLAUSES EXECUTIVE SUMMARY BACKGROUND 1. During debates in the House of Lords, concerns were expressed that the proposed measure did nothing to control the use of trustee exemption clauses. The powers conferred by this Act on trustees are in addition to the powers conferred by the instrument, if any, creating the trust, but those powers, unless otherwise state apply if and so far only as a contrary intention is not expressed in the instrument, if any, creating the trust, and have effect subject to the terms of that instrument. The principle applicable to cases of this description was stated by the late Master of the Rolls in Speight v Gaunt to be that a trustee ought to conduct the business of the trust in the same manner that an ordinary prudent man of business would conduct his own, and that beyond that there is no liability or obligation on the trustee.

Company law and the Charities Act impose similar duties on directors of charitable companies and trustees of CIOs. In addition, all trustees have a general duty of care which they must apply to all aspects of their role. Summary of the statutory provisions. This content is only available upon subscribtion to Techlink Professional.

This means that unless the trust deed restricts the type of investment, they are able to invest in any type of asset. Trustee is a legal term which, in its broadest sense, is a synonym for anyone in a position of trust and so can refer to any person who holds property, authority, or a position of trust or responsibility to transfer the title of ownership to the person named as the new owner, in a trust instrument, called a beneficiary. A trustee in land can be appointed by the beneficiaries as per s. The premium may be taken from either capital or income. The Act , however, helps the trustee who has made a prudent, modern portfolio-based investment decision that has the initial effect of skewing return from all the assets under management, viewed as a portfolio, as between income and principal beneficiaries.

The Act gives that trustee a power to reallocate the portfolio return suitably. We are principally concerned with profes-sional trustees who accept their trusteeships in return for fees. Sets out compulsory duties for trustees, which cannot be changed.