Trustees are known as “fiduciaries” – persons who have undertaken to act for others in a position of trust and confidence. As such, and subject to the terms of the trust deed, they owe a range of strict and absolute obligations to the beneficiaries of the trust. The courts exercise control over the conduct of trustees, and it is imperative that trustees discharge their obligations properly and fully.
In addition to their “core duty” to perform the trusts honestly and in good faith, their other duties include (a) the duty to act personally (i.e. not through delegation) (b) the duty to observe the terms of the trust deed and (c) the duty to account to the beneficiaries for the administration of the trust.
In particular, when making decisions (for example, how to invest the trust funds or whether to make distributions to the beneficiaries), they have duties to:
(a) Take part in decisions and to apply their minds to the exercise of the discretion entrusted to them.
(b) In exercising a discretion, to take into account all material considerations that they ought to have taken into account.
(c) Consider a beneficiary’s request to consider their discretion in that beneficiary’s favour.
(d) Not commit themselves with respect to the exercise of their discretion in future.
If they fail to do so, in certain circumstances their decisions may be set aside. In other circumstances, trustees may even be removed and replaced.
We assist trustees and beneficiaries by providing advice on all aspects of trust work – including opinions on legal issues relating to trusts, the administration of trusts, the interpretation of trust deeds, the duties of trustees, and the rights of beneficiaries.
We also act in litigation where disputes arise between trustees and beneficiaries, between executors and beneficiaries, or between these parties and persons outside the trust (e.g. creditors). This includes claims against trustees and executors at common law and under the Trustee Act 1956, Family Protection Act 1952, Law Reform (Testamentary Promises) Act 1949 and the Wills Act 2007. We can act in relationship property disputes under the Property (Relationships) Act 1976 following death or a defacto or marriage breakdown, where trusts are involved.