Trustee Powers and Beneficiary Entitlement Quiz
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Questions and Answers

According to the Trustee Act 2000, what is the trustees’ stance on purchasing freehold or leasehold land for occupation by a beneficiary?

  • It is strictly prohibited
  • They can only do so if it aligns with the charity's purposes
  • They are required to do so under all circumstances
  • It is up to the trustees’ discretion to decide whether or not to invest trust money in this way (correct)
  • What must trustees do when purchasing investments?

  • Obtain and consider proper investment advice from a suitable source (correct)
  • They need not seek any advice
  • Seek legal advice only
  • Consult with the beneficiaries
  • What type of investment breaches the trustees’ duty to invest impartially between all the beneficiaries?

  • Investments in real estate
  • Investment bonds with a focus on generating income for the life tenant (correct)
  • Investments in small start-up companies
  • Investments in government securities
  • What should trustees prepare when delegating asset management functions to an agent?

    <p>A statement of investment policy (policy statement)</p> Signup and view all the answers

    Under what circumstances are trustees not required to seek proper investment advice when making an investment?

    <p>When it would be reasonable to proceed without such advice</p> Signup and view all the answers

    What types of land can a trustee acquire in the UK under s 8 of the TA 2000?

    <p>Investment, occupation, and any other reason</p> Signup and view all the answers

    What can the settlor specify in the declaration of trust regarding investments?

    <p>Ethical sectors in which trustees should not invest</p> Signup and view all the answers

    What will professional trustees, such as solicitors, be entitled to when acting in a professional capacity?

    <p>Reasonable remuneration agreed to by the other trustees</p> Signup and view all the answers

    What happens if a trust instrument is silent on investment?

    <p>The Trustee Act (TA) 2000 will apply to the trustees’ exercise of their investment powers</p> Signup and view all the answers

    Are trustees generally justified in avoiding certain investments based on social, moral, or political views?

    <p>No, they are not generally justified</p> Signup and view all the answers

    What type of documents are beneficiaries entitled to see under trustee powers?

    <p>Trust accounts and documents showing how trust capital is invested</p> Signup and view all the answers

    What does 'trust documents' not include, as per trustee powers?

    <p>Documents revealing the decision-making process of the trustees</p> Signup and view all the answers

    What are common examples of income returns under trustee powers?

    <p>Dividends paid on shares, interest paid on bank accounts, and rent paid for the occupation of land</p> Signup and view all the answers

    When are adult contingent beneficiaries entitled to trust income under trustee powers?

    <p>Once they reach the age of 18</p> Signup and view all the answers

    What can beneficiaries do if they are not entitled to confidential documents under trustee powers?

    <p>They can ask the court to exercise its discretion to order disclosure of such documents</p> Signup and view all the answers

    What is the trustees' power under s 31 of the TA 1925 in relation to a minor beneficiary's income?

    <p>They must accumulate the income and transfer it with the trust capital when the beneficiary turns 18.</p> Signup and view all the answers

    In what scenario can trustees use s 31 of the TA 1925 to apply income for a minor beneficiary's maintenance, education, or benefit?

    <p>If there are no prior interests to the income.</p> Signup and view all the answers

    What happens if an adult contingent beneficiary dies before the specified condition is satisfied?

    <p>The estate of the contingent beneficiary will receive nothing, including no capital and no accumulated income.</p> Signup and view all the answers

    When can trustees apply trust capital for a beneficiary who is under 18 years old?

    <p>When they advance the capital by paying monies directly to a third party for the material improvement of the beneficiary.</p> Signup and view all the answers

    What kind of expenditure will not be considered as an advancement when it comes to using trust capital for a minor beneficiary?

    <p>Expenditure related to pleasure, leisure, or hobbies.</p> Signup and view all the answers

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