Chapter 12 Multiple choice questions

. Which of the following statements is true?

'An amateur trustee is entitled to be reimbursed from the trust funds, or may pay out of the trust funds, expenses properly incurred by him when acting on behalf of the trust' (s. 31(1) Trustee Act 2000, replacing the provision to like effect in s. 30(2) Trustee Act 1925).

'An amateur trustee is entitled to be reimbursed from the trust funds, or may pay out of the trust funds, the reasonable cost of his time spent acting on behalf of the trust'.

'An amateur trustee is entitled to be reimbursed from the trust funds, or may pay out of the trust funds, the full cost of his time spent acting on behalf of the trust'.

'An amateur trustee is entitled to be reimbursed from the trust funds, or may pay out of the trust funds, fees and expenses properly incurred by him when acting on behalf of the trust'.

. Where a trustee is a solicitor acting in his or her professional capacity he or she is entitled to reasonable remuneration if:

A non-professional trustee would be incapable of providing the services charged for.

Every other trustee has agreed to the remuneration in writing.

The solicitor is acting as sole trustee.

. Where the trust instrument specifies a level of remuneration for trustees, it follows that:

The court may award a higher level on the appointment of new trustees.

The court may never award a higher level.

The court may award a higher level only if it is in the best interests of the beneficiaries to do so.

The court may award a higher level only by varying the trust instrument under the Variation of Trusts Act 1958.

. In Re Berkeley Applegate Ltd [1989] Ch 32, Edward Nugee QC stated that:
"The authorities establish, in my judgment, a general principle that where a person seeks to enforce a claim to an equitable interest in property, the court has a discretion to require as a condition of giving effect to that equitable interest that an allowance be made for costs incurred and skill and labour expended in connection with the administration of the property". What maxim is being applied here?

He who seeks equity must do equity.

Nobody leaves the Court of Chancery without a remedy.

Equity sees as done that which ought to be done.

Equity imputes an intention to fulfil an obligation.

. The rule against unauthorised fiduciary profits applies:

Where the profit to the trustee causes a loss to the trust.

Only where there is a real and sensible possibility of conflict.

Where there is any possibility of conflict.

Strictly.

. Which of the following principles best explains the reason why the rule against unauthorised fiduciary profits takes the form it does?

Fairness.

Prevention is better than cure.

Compensation for wrong.

Disgorgement of unjustified enrichment.

. Which of the following accurately summarises the current law?

A trustee may not delegate his fiduciary duties to an agent.

A trustee may not delegate any trust duties to an agent.

A trustee may not delegate his administrative duties to an agent.

A trustee may delegate any of his trust duties to an agent, provided the agent is carefully chosen and properly appointed.

. Which of the following trustee functions is delegable in the case of a non-charitable trust?

The choice between income or capital as the source of a payment (such as payment of tax due).

The distribution of trust assets (e.g., under a discretionary trust).

Choice of trustee investments.

The appointment of a trustee, agent, nominee or custodian.

. Which of the following trustee functions is delegable in the case of a charitable trust?

Amending the charitable objects

Determining investment policy

Distributing trust income

Fund-raising activity

. Which of the following statements accurately summarizes the law?

Expenses incurred for the benefit of both the income and capital beneficiaries must be shared proportionately.

It is only expenses incurred exclusively for the benefit of the capital beneficiaries that may be charged against capital.

Expenses incurred for the benefit of both the income and capital beneficiaries must be shared equally.

Only expenses incurred exclusively for the benefit of the income beneficiaries that may be charged against income.

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