Trustees powers and duties

• What should trustees not do regarding personal profit?

  Trustees should not make a personal profit.
• What happens if a trustee pays for activities on behalf of the trust?

  The trustee will hold the payment on constructive trust for beneficiaries.
• Under what condition can a trustee show they would have been appointed regardless?

  If the trustee can prove they would have been appointed regardless of the payment.
• What is the consequence of making a personal profit from opportunities or information?

  It results in a constructive trust.
• When is a trustee entitled to be paid for their role?

  Only if the trust instrument provides for it.
• What is the exception for professional trustees regarding payment?

  Professional trustees can charge if not the sole trustee and have written consent from other beneficiaries.
• Can a trust corporation charge for being the sole trustee?

  Yes, a trust corporation can charge even if it's the sole trustee.
• What is the self-dealing rule regarding trustees purchasing property?

  Trustees may not purchase property owned by the trust.
• Under what conditions can a trustee purchase a beneficial interest?

  If they pay a fair price, disclose all material facts, and do not abuse their position.
• What is the burden of proof if a purchase of a beneficial interest is challenged?

  The trustee has the burden of proving the conditions were satisfied.
• What is the statutory duty of care for trustees when making investment decisions?

  Trustees must exercise care and skill as is reasonable in the circumstances.
• What must trustees consider when investing trust funds?

  Suitability of investment type, need for diversification, and obtaining proper advice.
• What is the maximum term for delegating functions to a power of attorney?

  12 months maximum.
• What is the duty of trustees regarding beneficiaries?

  Trustees must act impartially with beneficiaries.
• What is the discretionary statutory power of maintenance for trustees?

  It allows trustees to use trust income for a minor beneficiary's maintenance, education, or benefit.
• When does the power of maintenance end for a minor beneficiary?

  On their 18th birthday.
• What happens if a beneficiary has a vested interest in capital?

  The trust will end, and all trust property plus accumulated income must be transferred.
• What is the entitlement of a beneficiary with a contingent interest after their 18th birthday?

  They are entitled to claim all income after their 18th birthday, but accumulated income during minority accrues to capital.
• What is the discretionary power to advance capital for trustees?

  Trustees can advance capital to beneficiaries who have an interest in the capital, subject to certain conditions.
• What is required if an advance will prejudice a beneficiary with an interest?

  Written consent of the person with prior interest is required. E.g ‘a trust to X for life, with remainder to go to Y’ X only gets income but Y can get advancement of capital.

  HOWEVER = X must consent to the advancement of capital
• What is the limitation on advancements to beneficiaries for trusts created before October 2014?


  Advancements are limited to half of their share.
• Under what condition can a beneficiary demand to know the trustee's reasons for their decision?

  Only if there is a legitimate expectation that they would exercise their discretion in a particular way.
• Can an advancement of trust capital/income be made to a minor?

  yes, however must be made to purpose/parent as minors cannot give valid receipt