Trust

A detailed Summary of Trust

It is the duty of a trustee to administer the trust in accordance with the terms expressed by the settlor and the principles of equity. A trustee has various duties which must be performed at the outset of the trust. For example a trustee is under a duty :a) to invest the trust property prudently and in the accordance with the statue and the terms of the trust; b) to protect the interest of the beneficiaries or to sell the trust property to convert to investments; c) to keep accounts and records; d) not to make profit from the trust; e)to distribute the property to those entitled. However, I would only concentrate on the trustee's duty not to make profits at the expense of the trust, the effect of the conflict of interest and unjust enrichment.

A trustee may not make any profit from the fact that he acts as trustee: ' equity ..prohibits a trustee from making any profit by his management directly or indirectly. For however innocent an act of this nature may be in itself, it is poisonous with regard to its consequence. If any opportunity be given for making profits in this manner, a trustee will lose sight of his duty, and soon learn to direct his management chiefly or solely for his own benefit . Therefore, a trustee is n

Therefore rules like the self-dealing rule is created to try prevent problems like this. The self-dealing rule prohibits a trustee from purchasing the trust property unless specifically authorised to do so, and explicit authorizations are strictly construed. This is because the trustee acts both as vendor for the beneficiaries and purchaser, he places himself in an obvious conflict of interest and it is possible to determine whether he has served the beneficiaries interests property in securing the best price for them. Therefore, if a trustee sells a property to himself it is void as there arises a conflict of interest in getting a good price for the trust on the one hand, and getting a good price for himself which obviously will be lower than the trust price.

Secondly, the trustee should not profit from the exercise of a trustee's power, and is he does so, whatever he gained, would belong to the trust automatically. In Sugden v Crossland , A was the trustee of the will and B, wanting to become the trustee of the will, bribed A $75 to retire so that B could take his place in becoming a trustee. The court held that, the retirement of A and the appointment of B as a trustee was void. The payment of $75 now does not belong to either A or B but it belongs to the trust. Had A not been appointed a trustee by the settlor, B would not have bribed him, therefore, by receiving the bribe, the trustee is profiting at the expense of the trust.

ot permitted unless expressly or impliedly so authorised by the settlor to obtain any indirect or incidental profit or gain by reason of the fact that he is a trustee. There are a few ways that a trustee can profit at the expense of the trust through: remuneration; the exercise of a trustee's power; the exercise of rights attaching to legal ownership; and the use of knowledge or position.

Some common words found in the essay are:
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Approximate Word count = 1705
Approximate Pages = 7 (250 words per page double spaced)

Category: English