Equity Ws5 Running A Trust

Front 1

Common law duty of care for the amateur trustee is that of a prudent man of business

Back 1

Speight v Gaunt (1883)

Front 2

Trustee Act 2000 applies to all trusts, created before or after act came into force (with a couple of exceptions)

Back 2

Trustee Act 2000, s10(2)

Front 3

An investment for TA2000 is something expected to produce income or capital growth

Back 3

Harries v CofE Commissioners (1992)

Front 4

Definition of “investment” in Harries further supported

Back 4

Cook v Medawy Housing Authority (1997)

Front 5

An unsecured loan is not an investment for the purpose of TA2000

Back 5

Khoo Tek v Ch'ng Joo (1934)

Front 6

In relation to investments, Ts must use the reasonable care a person of business would for someone they feel morally bound to provide for

Back 6

Learoyd v Whitely (1886)

Front 7

Trustees failure to keep up with inflation held not to breach DoC. Duty is of reasonable man and not judged in hindsight.
– Could be pre-2000 Act
– Could benefit life tenant, not just remainderman

Back 7

Nestle v NatWest (1993)

Front 8

Not liable for investment decision unless no reasonable T with knowledge and skill would make it

Back 8

Wight v Olswang (2000)

Front 9

Wight v Olswang (2000)

Back 9

Cowan v Scargill (1985)

Front 10

If ethical investment E gives as good a return as evil investment V, Ts may choose E

Back 10

Cowan v Scargill (1985)

Front 11

Charitable trustees may avoid investments running in contradiction to their purpose

Back 11

Harries v CofE Commissioners (1992)

Front 12

“Trustees who take on themselves the management of property for the benefit of others have no right to shift their duty on to other persons

Back 12

Turner v Corney (1841)

Front 13

Trustees cannot delegate without authority to do so

Back 13

Pilkington v IRC (1964)

Front 14

Trustees not obliged to exercise discretion even if all Bs agree; they are obliged to consider whether or not to

Back 14

Re Brockbank

Front 15

Held that once B had advancement of half, no further advance allowed even if fund capital increases

Back 15

Re Marquess of Abergavenny's Estate (1981)

Front 16

“Advancement” for Trustee Act 1925 means “anything materially improving B's situation”

Back 16

Pilkington v IRC (1964)

Front 17

Held that some advances are improper; be cautious where parents of young Bs are concerned. If in doubt, pay direct to cause, e.g. school)

Back 17

Re Pauling's Settlement Trust (1964)

Front 18

Court may intervene if exercise of power or discretion is “improper”

Back 18

Tempest v Lord Camoys (1882)

Front 19

Courts may intervene and set aside appointments if Ts blindly follow settlor's instructions without using discretion

Back 19

Turner v Turner (1983)

Front 20

Court will intervene if exercise of discretion is capricious – i.e. irrational, perverse or irrelevant to any sensible expectation of the settlor

Back 20

Re Manisty's Settlement (1974)

Front 21

Traditionally an honst use of discretion could not challenged, but a court might intervene if the use of discretion is “wholly unreasonable”

Back 21

Dundee General Hospitals Board v Walker (1952)

Front 22

Ts are not obliged to provide reasons explaining use of discretion; if they do, the courts may test adequacy and void irrational decisions

Back 22

Klug v Klug (1918)

Front 23

Bs are allowed to see trust documents (subject to confidentiality) because Bs are entitled to court protection which might require documents
– Court can force disclosure

Back 23

Schmidt v Rosewood Trust (1965)

Front 24

Schmidt v Rosewood Trust (1965)

Back 24

Scott v National Trust (1998)

Front 25

B can end the trust if:
– 18+ and of sound mind (sui juris)
– Sole B entitled under trust
– has a vested interest

Back 25

Saunders v Vautier (1841)

Front 26

Saunders v Vautier does apply to Bs of discretionary trusts where all objects are ascertainable, sui juris and agree

Back 26

Re Smith (1928)

Front 27

Case of trust variation being a “benefit”, because although entitlement was delayed a life interest was surrendered

Back 27

Re Holt (1969)

Front 28

A rise in contingency age may be considered a benefit because a person is more responsible at 25

Back 28

Re T (1964)

Front 29

Variation of trusts, e.g. changing interests is probably OK, but a complete resettlement will not be accepted

Back 29

Re Ball's Settlement (1968)

Front 30

It is immaterial for the VTA whether the change is contrary to the settlor's wishes

Back 30

Goulding v James (1997)

Front 31

The court has no power under the VTA58 to agree on behalf of an adult consenting and ascertained B

Back 31

Knocker v Youle (1986)