The Provisions of the Trustee Act of 2000 Essay - 2

The Provisions of the Trustee Act of 2000 - Essay Example The trustee is the owner of the legal title of property and assets that are held in trust for the benefit of the beneficiaries. As spelled out by Lord Diplock in the case of Gissing v Gissing, a trustee holds the beneficial interest of claimants as cestui Que trust with such testator intention being spelled out in writing. The powers and duties of the trustees are defined in the deed of trust and they must hold regular meetings to demonstrate that they are fulfilling their duties. Trustees are obliged to act in a financially responsible manner to do their best to advance the interests of the trust and to achieve the intent of the testator.In the case of charitable trusts, grants or foundations where the class of beneficiaries is wider and where evidential uncertainties may exist, it places even more importance on the individual discretion of the trustees to invest in a manner that will serve to advance the social goals of the organization rather than be concerned with the accumulatio n of profits. On the whole, trustees have been endowed with the power to exercise their discretion in the matter of investing of the proceeds of the trust and the courts have rarely interfered with the right of the trustees to invest as they see fit. An examination into trust law and history, especially for charitable foundations, reveals the fact that it is not easy to explain why trustees have thus far refrained from investing on the basis of ethical choices.The fiduciary duty of a trustee or a person/s in the position of trustees is set out in the case of Lloyds Bank Limited v Bundy   wherein there is a special relationship between the trustee and beneficiary which places a fiduciary duty on a trustee’s shoulders to faithfully execute the testator’s will and honor his duties. A trustee will be liable for a breach of that trust. Trustees are obliged to act in an even-handed manner without any partiality or undue favoring of one beneficiary over the other, for examp le in the case of Re Smith, the courts held that a failure to act impartially constituted a breach of trust. A trustee is not only expected to exercise a duty in care, he/she is also expected to exercise a duty in cautionary investment and balance them between capital and income investments so that he/she refrains from selecting risky or speculative instruments.