What are the major commercial reasons that people choose to create and operate express trusts?

Question 9.2

Identify the following types of trusts?

a) The trust document confers on the trustee discretion to select who is in the designated class of potential beneficiaries to receive any benefit and to decide the amount of any benefit to be paid.

b) The trust creates and grants to each beneficiary proprietary interests in the trust property or the income derived from that property. The trustee has no discretion regarding distribution of income and property.

c) The trust creates and grants to each beneficiary a fixed equitable interest in the capital and income of the trust calculated by reference to the proportion of units each beneficiary holds in relation to the total number of units issued.

Question 9.3

Peter has been appointed trustee of Nina's testamentary express trust. The trust document states that the trust applies to "...most of my estate, including my shares and two-thirds of my antique collection." It goes on to state that "half of the two-thirds of the antique collection is to be held for the grandchildren that loved me most". Can Peter fulfil the terms of Nina's trust?

Give reasons for your answer.

Question 9.4

What law governs trustees?

Question 9.5

Is there any conduct by the beneficiary which may prevent them being granted an equitable remedy for breach of a fiduciary duty by the trustee?

Question 9.6

What are the only circumstances under which a trustee is not bound to carry out the terms of the trust instrument?

Question 9.7

Elaine is the trustee of a trading trust and enters into a contract with a service on behalf of the trust. The business of the trading trust is not financially sound and when the service is complete there are insufficient trust funds to pay the debt.

Giving reasons for your answer, explain who will be liable to pay the outstanding debt.

Question 9.8

How is the existence and continuity of a trust affected by the death of a beneficiary?