20 Questions
According to the Trustee Act 2000, what is the trustees’ stance on purchasing freehold or leasehold land for occupation by a beneficiary?
It is up to the trustees’ discretion to decide whether or not to invest trust money in this way
What must trustees do when purchasing investments?
Obtain and consider proper investment advice from a suitable source
What type of investment breaches the trustees’ duty to invest impartially between all the beneficiaries?
Investment bonds with a focus on generating income for the life tenant
What should trustees prepare when delegating asset management functions to an agent?
A statement of investment policy (policy statement)
Under what circumstances are trustees not required to seek proper investment advice when making an investment?
When it would be reasonable to proceed without such advice
What types of land can a trustee acquire in the UK under s 8 of the TA 2000?
Investment, occupation, and any other reason
What can the settlor specify in the declaration of trust regarding investments?
Ethical sectors in which trustees should not invest
What will professional trustees, such as solicitors, be entitled to when acting in a professional capacity?
Reasonable remuneration agreed to by the other trustees
What happens if a trust instrument is silent on investment?
The Trustee Act (TA) 2000 will apply to the trustees’ exercise of their investment powers
Are trustees generally justified in avoiding certain investments based on social, moral, or political views?
No, they are not generally justified
What type of documents are beneficiaries entitled to see under trustee powers?
Trust accounts and documents showing how trust capital is invested
What does 'trust documents' not include, as per trustee powers?
Documents revealing the decision-making process of the trustees
What are common examples of income returns under trustee powers?
Dividends paid on shares, interest paid on bank accounts, and rent paid for the occupation of land
When are adult contingent beneficiaries entitled to trust income under trustee powers?
Once they reach the age of 18
What can beneficiaries do if they are not entitled to confidential documents under trustee powers?
They can ask the court to exercise its discretion to order disclosure of such documents
What is the trustees' power under s 31 of the TA 1925 in relation to a minor beneficiary's income?
They must accumulate the income and transfer it with the trust capital when the beneficiary turns 18.
In what scenario can trustees use s 31 of the TA 1925 to apply income for a minor beneficiary's maintenance, education, or benefit?
If there are no prior interests to the income.
What happens if an adult contingent beneficiary dies before the specified condition is satisfied?
The estate of the contingent beneficiary will receive nothing, including no capital and no accumulated income.
When can trustees apply trust capital for a beneficiary who is under 18 years old?
When they advance the capital by paying monies directly to a third party for the material improvement of the beneficiary.
What kind of expenditure will not be considered as an advancement when it comes to using trust capital for a minor beneficiary?
Expenditure related to pleasure, leisure, or hobbies.
Test your knowledge of trustee powers and beneficiary entitlements with this quiz. The quiz covers topics such as access to trust documents, confidentiality of trustee decision-making processes, and beneficiary rights.
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