Equity gives certain powers and duties to trustees to enable the trust to be implemented in a forthright manner.

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Dermot is one of the trustees to a family trust. Equity gives certain powers and duties to trustees to enable the trust to be implemented in a forthright manner. The trustee’s job is to be concerned not only with benefiting the beneficiaries, but also to make sure that the wishes expressed by the testator are carried out correctly.

A trust created by deed of settlement or will, will generally give wide powers of implementation to the trustees and will almost certainly have been drafted with tax purposes in mind. The trustees job involves not only covering their duties within the terms of the trust, but also to show discretion when deciding different situations.

The powers and duties will vary from trust to trust, such as whether the trustees are to accumulate or distribute the income. Most of the powers now available to trustees are laid down under statutory provision in the TIA 1961, these are chiefly concerned with managing the trust, including taking expert advice on certain matters such as law issues or trading advice.

The trustees must stick to the rules of apportionment; this is used to keep the balance between the capital and income. They must consider all kinds of investments, including sale of property and payment of tax. Accounts must be kept and copies given to the beneficiaries, other duties involving the loyalty to the trust are, not taking any personal profit from the trust, keeping trust property safe and investing trust money safely and wisely. Perhaps the most interesting duty is to keep a fair and just balance between the beneficiaries.

Trusts usually require one of the trustees to have a professional knowledge of business, as the job can be very demanding. This can be either a professional establishment such as a bank, or an accountant or lawyer etc. It would seem in this case that Dermot is a professional of some sort. Turner v Turner [1984] illustrates the difficulties, which can appear if there are no professional trustees.

The duty of care is a trustees overriding duty to do the best they can for the beneficiaries and is statutory under section 1(1) of TA 2000 part 1. The powers given to trustees are subject to the terms of the trust instrument, these apply only to the extent that wider powers are not expressly given, section 69(2) of the TA 1925. The trustees have the discretion as to whether or not they will exercise that power, after deliberation with the other trustees, if they decide not to use the power the beneficiaries do not have any right to redress. The duty is to undertake consideration where it is appropriate.

The power of maintenance is not implied into the trust instrument, therefore it must be expressly given, or advantage must be taken of the power under section 31 of the TA 1925. Therefore if no contrary intention exists then the statutory powers will apply. The power to maintain under section 31 can only arise where the beneficiary is entitled to receive intermediate income under the trust. Section 31(3) is where maintenance can only be provided where the gift carries the income. A life tenant will normally be entitled to the income, so the existence of such a tenant will mean that the power of maintenance cannot be experienced in favour of those entitled to the remainder.  Under section 31, assuming the income to be available, the trustees must show regard to the age of the minor, whether any other income is available for his/her maintenance and consider any other relevant factors. The money may be paid to a parent or guardian for the benefit of the minor.

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In this case it would be suggested that Flora aged 24 would not be able to receive the money as she is over the age of majority. It would also be suggested that under section 31 Hotspur could be entitled to the money as it is for the maintenance of his education, however under section 31(3) it would appear that it could be refused. The trustees would have to be unanimous on any decision regardless of whether Geraldine or Paul showed their approval.

The power of advancement allows trustees to pay capital sums to, or on behalf of ...

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