Equity and Trusts: Duties and Powers of Trustees

Trustees’ duties and powers

Accepting the trust: must investigate any possible breaches; inspect any relevant documents; know and accept the terms of the trust; and ensure the property is vested.

Duties: 

Treat all beneficiaries the same 

Do not delegate 

Do not profit from the trust

Provide information to beneficiaries

Must not act gratuitously

Powers must be exercised unanimously

Powers: 

Remuneration for professional trustees

May delegate to a specialised professional

May invest the property

May insure the property

Dealings with land.

Power of maintenance: s.31 – providing the beneficiary with an allowance out of the income from trust property. The court also has discretion to order this. It may also be expressly requested or permitted by the trust document - Re Stapleton. Should be for the beneficiary’s maintenance, education or benefit. May be expressly excluded by the trust document - Re Turner’s WT.

Power of advancement: s.32 – providing the beneficiary with the capital they would be entitled to anyway, before it becomes due. Pilkington v IRC  - wide definition of benefit and advancement under statute. Limitations to the power: may only ever give up to half of the beneficiary’s interest in advance, any gift given early will be considered and deducted when it eventually becomes due, and it must not interfere with the interest of any other person. Re Pauling’s Settlement Trusts – 1) Is it in the beneficiary’s interests? 2) Have the beneficiaries been treated even-handedly? 3) Has the trustee exercised his fiduciary power correctly?