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

of bonds and listed company shares.

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