This website uses cookies to ensure you get the best experience on our website. Learn more

LPC Law Notes Private Client Notes

Trustees Powers Notes

Updated Trustees Powers Notes

Private Client Notes

Private Client

Approximately 235 pages

A collection of the best LPC Private Client the director of Oxbridge Notes (an Oxford law graduate) could find after combing through twenty-nine LPC samples from outstanding students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor".

In short these are what we believe to be the strongest set of Private Client notes available in the UK this year. This collection of notes is fully updated f...

The following is a more accessible plain text extract of the PDF sample above, taken from our Private Client Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

Powers for Trustees

Legislation:

  • Trusts of Land and Appointment of Trustees Act 1996 [TLATA_

  • Trustee Act 2000 [TA]

POWER
Power to insure
  • S.19 TA 1925 = very restrictive on what Personal Representatives [PRs] / Trustees could insure against

  1. Insure only against loss or damage by fire;

  2. Insure up to 75% of the value of the property max;

  3. Had to pay premiums out of income

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

  • S.34 TA 2000: substituted a new S.19. Wide powers to insure:

  • Against all property to its full value [however caused].

  • Pay premiums out of trust funds [can use capital and / or income]

  • Applies to ALL trusts whenever created.

  • Statutory power is adequate without need for extension.

  • Be aware that old wills [drafted before 2000] often include provisions to extend powers to insure.

Power to appropriate
  • 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 1000) 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:

  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 – consent would not be possible in this case

  1. 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.

  • NB. If asset is likely to change in value – then keep the statutory restriction.

Power to accept RECEIPTS from or on behalf of a minor
  • Receipt = discharge PRs from liability. Signed by the person entitled [i.e. beneficiary]. Provides evidence of legacy being paid [for purpose of any potential dispute]

  • General law = unmarried minor cannot give receipt for capital OR income. A married minor can ONLY give receipt for income. Danger of PR being personally liable.

  • S.3 Children Act 1989: PR can accept receipt from parent / guardian in respect of income and capital to which minor is entitled.

  • S.42 AEA 1925: Where minor beneficiary is entitled absolutely - PR can appoint a trustee to hold property for that minor. Trustee can provide a receipt. This is often inconvenient.

Will drafting:

  • Consider allowing receipts from 16 years olds

Power to invest
  • Trustees holding relevant proportions of the estate [as directed by the will]. Ts must invest the trust fund – they have a fiduciary duty under general trust law.

  • Trustee Investment Act 1961 = very restrictive

  • Trustee Act 2000: S.3trustee may make any kind of investment that he could make if he were absolutely entitled to the asset of the trust”. Wide powers to invest now!

  • NB. Trustees STILL have to consider standard investment criteria [e.g. suitability of investment; need for diversification; obtain proper advice unless it is unnecessary].

  • TA 2000 also gives Trustees power to delegate and vest trust property in a nominee

  • TA 2000 imposes a duty of care on trustees to exercise skill and care that is reasonable in the circumstances

Will drafting:

  • No need for amendment in most cases as TA 2000 confers the discretion that trustees require

  • Should there be a provision for:

Suitability
Diversification
Review – e.g. every 6 months
T seeking advice
Power to purchase land
  • S.8 TA 2000 – allows trustee to purchase freehold / leasehold land in the UK

  • Applies to all trusts [whenever created] – subject to any restriction in the will

  • Applies to legal interest only

  • Land can be used for anything – investment, for beneficiary’s occupation or any other reason. [Remember fiduciary duty]

Will drafting:

  • Extend to outside the UK if it is suitable

Power to maintain a minor

“maintenance”

  • The power enabled the minor to benefit from the INCOME of a trust fund whilst under age. Trustee has to use discretion in favor of that minor.

  • S.31 TA 2000: contains some restrictions:

  1. Trustee can only advance a reasonable sum of income

  2. 3 considerations that trustee must adhere to =

  1. Age and requirements of the minor

  2. general circumstances of the case

  3. If there is any other income applicable for the same purpose

  1. S.31(2) TA = minor has right to the income at the age of 18. Plus any accumulated income.

Will drafting:

  • Remove the need for...

Buy the full version of these notes or essay plans and more in our Private Client Notes.

More Private Client Samples