Trustee's General Functions and Standard of Care

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Questions and Answers

What is the standard of care of a trustee as expressed in the Trust Act of Belize?

that of a highly skilled business expert

that of a professional lawyer

that of an ordinary prudent man of business (correct)

that of a reasonable person

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 (correct)

Acting with the intention to benefit oneself

Acting with the intention to harm others

Acting as an honest person would in the circumstances

What is a duty of a trustee upon acceptance of the trust?

To take legal advice on the trust

To act with utmost good faith

To distribute the trust assets immediately

To inquire about the property and trusts (correct)

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 Signup and view all the answers

What is a trustee's duty to obey in the settlement?

Directions sanctioned by the court Signup and view all the answers

What is the duty of a paid, professional trustee?

To act with a higher standard of care and diligence Signup and view all the answers

What can exclude the general duty of skill, care, and diligence of a trustee?

The express terms of the trust instrument Signup and view all the answers

What is a trustee's duty in relation to the assets under his control?

To account for his stewardship of the assets Signup and view all the answers

What is the fundamental requirement of a trust?

To owe enforceable obligations to beneficiaries Signup and view all the answers

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 Signup and view all the answers

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 Signup and view all the answers

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 Signup and view all the answers

What is one of the core obligations of a trustee?

To inquire into the extent and nature of the property and the trusts Signup and view all the answers

What is the responsibility of a trustee regarding the beneficiaries?

To give beneficiaries information as to how the trust is being managed Signup and view all the answers

What is the primary goal of a trustee regarding the trust property?

To preserve and enhance the value of the trust property Signup and view all the answers

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 Signup and view all the answers

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).

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Description

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.