Connor Reid died recently. In his Will, he established a trust for his niece, Marlene, for life, remainder to Marlene's children, Joely and Poppy, in equal shares. The Will contains no express provisions in relation to investments, maintenance, or advancement. The property put into trust by Connor Reid included 100,000 in cash and a watercolour painting. Connor appointed his friends, Tanya Jones and Steven Bradley, to be the trustees. Tanya is a nurse and Steven is a surveyor. Marlene is a single parent, aged 46. She works full time, earning a salary of 32,000 per year. Marlene is managing financially on her salary, though she would like a modest income from the trust fund, to pay for holidays and other luxuries. Joely is aged 22 and has recently graduated from university with a master's degree in Photography & Business Management. Poppy is aged 20 and is currently at university. The trustees took advice from Anderson Roland, an investment firm with experience in offering advice to trusts. Anderson Roland recommended that the trustees invest the 100,000 cash in the Capability Balanced Fund (the Fund). The Fund comprises a range Anderson Roland also recommended that the trustees seek a professional valuation of the painting from an art expert, with a view to selling it and then investing the proceeds in the Fund. The art expert valued the painting at 5,000, though she warned the trustees that they would struggle to find a buyer, because there is no demand for paintings by this artist. The painting will be offered for sale at an appropriate auction next month, though the auction house has confirmed the art expert's opinion that it probably will not sell. The auction house has recommended a reserve price of 4,000, to protect against very low bids. On Thursday of last week, the trustees emailed the beneficiaries to update them on the investment and the auction, and received replies from each of them. After that, the trustees had an email exchange just with each other. Please see the attached case study for copies of the emails. You are the lawyer for the Trust. The trustees have requested advice on (1) how they should proceed in relation to the painting, and (2) how they should respond to the request made in the email from Joely. You are NOT required to advise upon the proposed investment in the Fund.

From: Tanya Jones Sent: Thursday 15:20 To: Steven Bradley, Marlene Reid, Joely Reid & Poppy Reid Subject: Re: Connor Reid Will Trust Hi Everyone We have now received advice about how we should invest your fund. We are going to invest the 100,000 cash in the Capability Balanced Fund, which will give us an income as well as a reasonable rate of long-term capital growth. The risk level is low to medium, which our advisers say is appropriate for the Trust. Marlene, we have been told that you can expect about 5,000 income each year from this investment. However, we have a problem with the watercolour painting. An art expert has valued it at 5,000, but she has warned us that we will struggle to find a buyer. Apparently, the artist is no longer popular, so there is no demand for his work. We don't want to keep it. For starters, we don't have anywhere to store it. I don't suppose any of you want it, to hang on your own wall, do you? Assuming you don't want to keep it, we have arranged to put it up for auction next month and hope that it sells. We are going to put a reserve price of 4,000 on it, otherwise it might sell for pennies! Tanya _______________________________________________________________ ____________ From: Marlene Reid Sent: Thursday 15:42 To: Tanya Jones, Steven Bradley, Joely Reid & Poppy Reid Subject: Re: Connor Reid Will Trust _______________________________________________________________ ____________ Hi Tanya and Steven I'm happy with an income of 5,000 and the painting was never going to add much to that anyway. That said, I know that Joely needs some money. I'm not sure how much she needs, but if you can sell the painting somehow, perhaps you can let her have what she wants. Marlene [module name] [module code] Assessed Coursework 2020/21 Page 6 of 9 _______________________________________________________________ ____________ From: Joely Reid Sent: Thursday 16:10 To: Tanya Jones, Steven Bradley, Marlene Reid & Poppy Reid Subject: Re: Connor Reid Will Trust _______________________________________________________________ ____________ Hi Tanya and Steven That painting is hideous, so just sell it at whatever price you can get for it. If you do manage to sell it, can I have some money please? I want to set up my own business as a freelance photographer, specialising in 'occasions, such as parties, holidays and other celebrations. I also want to take time to enjoy myself and travel the world, but I can combine business with pleasure. A new cruise operator, Sunny Seas, has offered me a 50% discount on their first tour, if I will use some of the time to take photographs of my fellow passengers. Sunny Seas has agreed that I can charge passengers a fee for copies of the photographs. Sunny Seas will use the photographs on its website to promote its business, and I can include the photographs in my own portfolio, to help build my business. However, I don't have the money to pay for the cruise, even at a discount. Also, I will need a higher quality camera and accessories. The cruise will cost me 2,000 (the usual price is 4,000) and the camera and accessories will cost 1,000. Can I have 3,000 of my capital early, to cover these costs? Joely _______________________________________________________________ ____________ From: Poppy Reid Sent: Thursday 16:21 To: Tanya Jones, Steven Bradley, Marlene Reid & Joely Reid Subject: Re: Connor Reid Will Trust _______________________________________________________________ ____________ Hi Tanya and Steven I agree with Joely; that painting is appalling. Just get rid of it please! Poppy _______________________________________________________________ ____________ From: Tanya Jones Sent: Thursday 16:30 To: Steven Bradley, Marlene Reid, Joely Reid & Poppy Reid Subject: Re: Connor Reid Will Trust _______________________________________________________________ ____________ Thanks Everyone. Steven and I will have a chat and decide what to do next. Tanya

From: Tanya Jones Sent: Thursday 17:12 To: Steven Bradley Subject: Re: Connor Reid Will Trust _______________________________________________________________ ____________ Hi Steven So what do you think? The beneficiaries clearly want the painting to be sold, but I suspect they will be disappointed, given what the expert said about it. Tanya _______________________________________________________________ ____________ From: Steven Bradley Sent: Thursday 17:42 To: Tanya Jones Subject: Re: Connor Reid Will Trust _______________________________________________________________ ____________ Hi Tanya Actually, I would like to buy the painting myself. I recently received 5,000 from my parents for my 50th birthday and want to buy something special with the money. I think the painting is beautiful and I am sure the artist will gain in popularity over time, so it could be a good investment for me. What do you think? Steven _______________________________________________________________ ____________ From: Tanya Jones Sent: Thursday 18:03 To: Steven Bradley Subject: Re: Connor Reid Will Trust _______________________________________________________________ ____________ Hi Steven I don't see why you shouldn't buy it if you want to. How much are you willing to pay? Tanya _______________________________________________________________ ____________ From: Steven Bradley [module name] [module code] Assessed Coursework 2020/21 Page 8 of 9 Sent: Thursday 18:10 To: Tanya Jones Subject: Re: Connor Reid Will Trust _______________________________________________________________ Hi Tanya I am happy to buy the painting privately from the Trust and to pay 5,000 for it. However, it occurs to me that perhaps I should go to the auction and just bid on it in the usual way. Given what the expert and the auction house both said, I might be the only bidder. If that is the case, then of course I will pay the reserve price. Steven From: Tanya Jones Sent: Thursday 18:15 To: Steven Bradley Subject: Re: Connor Reid Will Trust Hi Steven I think you can bid at the auction or buy it privately, whichever suits you. It doesn't look like anyone else will want it. If you buy the painting, then we should have the money that Joely asked for. What do you think about that? Can we let her have the money, or do we have to invest it all in the Fund, as we originally planned? Tanya From: Steven Bradley Sent: Thursday 18:27 To: Tanya Jones Subject: Re: Connor Reid Will Trust Hi Tanya I'll think about the painting and let you know soon whether I want to bid at auction or just pay the Trust for it privately. I don't think we can just let Joely have any of her capital early, can we? She isn't supposed to have any money until Marlene dies. I suggest we check with the Trust's lawyers about me buying the painting and Joely's request for capital. Steven