Podcast
Questions and Answers
What is the consequence of a trustee's refusal to act or disclaimer?
What is the consequence of a trustee's refusal to act or disclaimer?
- The trustee's power is suspended until further notice
- The trust remains valid and a new trustee can be appointed (correct)
- The trustee's duties are delegated to another person
- The trust is automatically terminated
In what circumstances can a minor have a beneficial interest in a trust?
In what circumstances can a minor have a beneficial interest in a trust?
- Only if they are a beneficiary of a will
- Only if they are an express or land trust beneficiary (correct)
- Only if they are a trustee of the trust
- Only if they are a settlor of the trust
What is the consequence of a trustee's wilful default?
What is the consequence of a trustee's wilful default?
- The trust is automatically terminated
- The trustee is removed from their position
- The trustee is liable for any losses incurred by the trust (correct)
- The trustee's power is suspended until further notice
Who can appoint a new trustee to replace an existing one?
Who can appoint a new trustee to replace an existing one?
What is the effect of a trustee's delegation of their duties?
What is the effect of a trustee's delegation of their duties?
In what circumstances can a trustee be removed from their position?
In what circumstances can a trustee be removed from their position?
What is the effect of a trustee's advance of trust funds to a beneficiary?
What is the effect of a trustee's advance of trust funds to a beneficiary?
Who is entitled to the remuneration of a trustee?
Who is entitled to the remuneration of a trustee?
What is the condition for a trustee to retire with replacement according to Section 40(1)?
What is the condition for a trustee to retire with replacement according to Section 40(1)?
What happens to the trust property if the last surviving trustee dies according to Section 40(8)?
What happens to the trust property if the last surviving trustee dies according to Section 40(8)?
What is one of the grounds for removal of a trustee by the court?
What is one of the grounds for removal of a trustee by the court?
When is a trustee entitled to receive remuneration for their work?
When is a trustee entitled to receive remuneration for their work?
What is the effect of a trustee's disclaimer before acceptance?
What is the effect of a trustee's disclaimer before acceptance?
What is the difference between a duty and a power of a trustee?
What is the difference between a duty and a power of a trustee?
Under what circumstances can a court relieve a trustee from liability for a breach of trust?
Under what circumstances can a court relieve a trustee from liability for a breach of trust?
Under what section can a trustee apply to court to retire without getting consent from co-trustees?
Under what section can a trustee apply to court to retire without getting consent from co-trustees?
What is the purpose of tracing in trust law?
What is the purpose of tracing in trust law?
What is the consequence of a minor breach of trust?
What is the consequence of a minor breach of trust?
What is the effect of a breach of trust by a passive trustee?
What is the effect of a breach of trust by a passive trustee?
When can a trustee delegate their powers?
When can a trustee delegate their powers?
What is one of the factors that the court considers when removing a trustee?
What is one of the factors that the court considers when removing a trustee?
What is the effect of a wilful default by a trustee?
What is the effect of a wilful default by a trustee?
Can a trustee claim remuneration for their work if it was not expressly authorized?
Can a trustee claim remuneration for their work if it was not expressly authorized?
What happens to the trust property if the personal representative of the last surviving trustee holds it until the court appoints a new trustee?
What happens to the trust property if the personal representative of the last surviving trustee holds it until the court appoints a new trustee?
Study Notes
Trustee's Appointment and Removal
- A trustee can be removed if they are unfit to act, e.g. due to bankruptcy (Re Barker and Re Roche)
- A trustee can be removed if they are incapable of acting, e.g. due to mental illness (Re Lemann)
- A trustee can be removed if they are a minor (Re Vindargoff)
- A trustee can be removed by the court if they are dishonest, incompetent, or in breach of trust (Re Smirthwaite)
- A new trustee can be appointed by the court, settlor, or another trustee (S40, S45)
- A trustee's appointment can be made through a trust deed, will, or other documents (I)
Effects of Appointment
- The legal title of the trust property goes to the trustee (Sec 44)
- The trustee's name is recorded on the land title, share certificates, and bank books (Sec 44)
Remuneration of Trustees
- A trustee is not entitled to remuneration unless it is authorized in the instrument, by the court, or by statute (S46)
- A trustee can be entitled to remuneration if they have made a profit while managing the trust (Re Duke)
- A trustee's remuneration must be fair and reasonable (Re Duke)
Breach of Trust
- A breach of trust can occur before, during, or after the trust (E)
- A breach of trust can be serious, e.g. leaving the trust fund, or minor, e.g. failing to follow directions (E)
- A trustee can be liable for a breach of trust if they did not take reasonable steps to prevent it (Re Haji Ali)
Defenses
- The court can relieve a trustee wholly or partly if they acted honestly, fairly, and reasonably (S63)
- A trustee can get compensation if the breach occurred with the consent and request of the beneficiary (S64)
Remedies
- Tracing: following the trust property to claim it back (G)
- Acceptance of trusteeship: a trustee can accept or disclaim their appointment (G)
Termination of Trusteeship
- A trustee can retire with a replacement (S40)
- A trustee can retire without a replacement if they have the consent of the co-trustees or the court (S43)
- A trustee can apply to the court to retire if they did not get consent from the co-trustees (S45)
- If the last surviving trustee dies, the trust property passes to their personal representative (S40)
Duties of Trustees
- A trustee has a legal obligation to act in the best interests of the beneficiary (A)
- A trustee has the power to manage the trust property, but it is not mandatory (A)
- A trustee must act honestly, fairly, and reasonably (B)
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Description
This quiz tests your understanding of trust laws, obligations, and related concepts. It covers scenarios involving trustees, settlers, and disclaimers.
