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Trustees Powers Notes

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Trustees Powers Revision

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Elective: Private Client

Powers for Trustees Legislation:

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Trusts of Land and Appointment of Trustees Act 1996 [TLATA_ Trustee Act 2000 [TA]

POWER Power to insure

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S.19 TA 1925 = very restrictive on what Personal Representatives
[PRs] / Trustees could insure against a) Insure only against loss or damage by fire; b) Insure up to 75% of the value of the property max; c) Had to pay premiums out of income

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TLATA 1996 = could also insure land [but still not other assets] for its full value

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S.34 TA 2000: substituted a new S.19. Wide powers to insure: o Against all property to its full value [however caused]. o Pay premiums out of trust funds [can use capital and / or income]
o Applies to ALL trusts whenever created.

Power to appropriate

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Statutory power is adequate without need for extension. Be aware that old wills [drafted before 2000] often include provisions to extend powers to insure.

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S.41 Administration of Estates Act 1925 PRs have power to appropriate any part of the estate towards satisfaction of a legacy - provided that no specific beneficiary is thereby prejudiced. [e.g. cannot appropriate a clock for Carol [beneficiary of
PS1000) if Ben has already been left the clock in the will. Also a useful power if there is split residues. [2 people have entitlement]
S.41 imposes some restrictions which can be amended if appropriate:

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1. Must get consent of person to whom PR is making appropriation. AMMEND: remove need for consent. WHY: Administration is easier. What if beneficiary is a minor - consen would not be possible in this case

2. Must get valuation of the object at date of appropriation [not at date of death]. AMMEND: remove need for re-valuation. Use the valuation at date of death instead. [unless asset has grossly changed in value since date of death]. So PR appropriates at probate value!
WHY: Avoid expense. Administration of estate is easier / simple. o NB. If asset is likely to change in value - then keep the statutory restriction. 1

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