16 Questions
What is the standard of care of a trustee as expressed in the Trust Act of Belize?
that of an ordinary prudent man of business
According to the case of Royal Brunei Airlines v Tan, what does acting dishonestly mean?
Not acting as an honest person would in the circumstances
What is a duty of a trustee upon acceptance of the trust?
To inquire about the property and trusts
What is the duty of a trustee in the management of trust affairs?
To take all precautions an ordinary prudent man in business would take
What is a trustee's duty to obey in the settlement?
Directions sanctioned by the court
What is the duty of a paid, professional trustee?
To act with a higher standard of care and diligence
What can exclude the general duty of skill, care, and diligence of a trustee?
The express terms of the trust instrument
What is a trustee's duty in relation to the assets under his control?
To account for his stewardship of the assets
What is the fundamental requirement of a trust?
To owe enforceable obligations to beneficiaries
What is the primary duty of a trustee in relation to the trust property?
To ensure the trust property is held by or vested in them
What is the minimum necessary duty of a trustee to give substance to the trusts?
To perform the trusts honestly and in good faith for the benefit of the beneficiaries
What is the duty of a trustee regarding the trust investments?
To act honestly and in good faith, even if their investment decisions may be deemed imprudent
What is one of the core obligations of a trustee?
To inquire into the extent and nature of the property and the trusts
What is the responsibility of a trustee regarding the beneficiaries?
To give beneficiaries information as to how the trust is being managed
What is the primary goal of a trustee regarding the trust property?
To preserve and enhance the value of the trust property
What is the quote that highlights the importance of a trustee's role?
A trust is an act of great kindness in anyone to accept it
Study Notes
General Functions of a Trustee
- A trustee's role is to preserve and enhance the value of the fund, pay income and capital to entitled beneficiaries, and provide them with information on the trust's management.
- A trustee must ensure that trust property is held by or vested in them, and preserve and enhance its value, as stated in the Trust Act of Belize (S.27(5)).
Standard of Care
- The standard of care for a trustee is that of an "ordinary, prudent man of business" (S.27 Trust Act Belize).
- A trustee must take all precautions that an ordinary prudent man would take in managing similar affairs (Speight v Gaunt).
- A professional corporate trustee is liable for breach of trust if they neglect to exercise the special care and skill they profess to have (Bartlett v Barclay Trust).
Core Obligations
- A trustee has a duty to inquire into the extent and nature of the property and the trusts (Nestlé v NW Bank).
- A trustee must obey directions in the settlement unless the deviation is sanctioned by the court.
- A trustee must act honestly and in good faith for the benefit of the beneficiaries, without necessarily including duties of skill, care, prudence, and diligence (Armitage v Nurse).
- A trustee has a duty to account for their stewardship of the assets under their control.
- A trustee must carry on the business of the trust with the degree of prudence expected of a hypothetically ordinary prudent man of business (Speight v Gaunt).
Duties of a Trustee
- Upon acceptance of the trust, a trustee is bound to inquire about the property and trusts, and review the trust documents and papers (Hallows v Lloyd).
- A trustee must act with due diligence, utmost good faith, and to the best of their skills and abilities (S.27 Trust Act Belize).
This quiz covers the general functions of a trustee, including preserving and enhancing the value of the fund, paying income and capital to beneficiaries, and providing information about the trust's management. Learn about the standard of care expected from a trustee based on the Knight v Earl of Plymouth case.
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