Allowable investments under the trustee and substitute. Persons who may be appointed as nominees or custodians. The trustee act 2000, which received royal assent last year, came into force on february 1, 2001. A welldrafted trust agreement will give the trustee some guidance as to what his priorities should be for each beneficiary. A trustee must give consideration not only to any specific investment powers which are set out in any trust documents, but also to the investment powers which are set out in statute, specifically the trustee act 2000 the act. A trustee s investment decisions regarding individual assets must be evaluated in the context of the trust portfolio as a whole and as part of an overall strategy having risk and return objectives reasonably suited to the trust. Superannuation general provision act 2000, being an act to make provision for the licensing, regulation and supervision of superannuation funds, trustees, investment managers and fund administrators, the imposition of mandatory contributions to superannuation funds and to amend various acts and for related purposes. Theoretical underpinnings of trust investment law ggu law. Stephen pallister and zoe hoopersmith look at its likely. Special needs trust guidelines the essential purpose of a special needs trust is to improve the quality of an individuals life without disqualifying them from eligibility to receive public benefits.
The trustee act 2000 a major changethe trustee act 2000 brings in the biggest change to trust law in england and wales for 75 years. Trustee act 2000 is up to date with all changes known to be in force on or. Reform in these areas had been advised as early as 1982, and finally came about through the trustee bill 2000, based on the law commissions 1999 report trustees powers and duties, which was introduced to the house of lords in january 2000. Revised legislation carried on this site may not be fully up to date. The standard investment criteria, in relation to a trust, are. The trustee act 2000 places on statutory footing what the statute labels the. Obtain and consider expert advice where appropriate. The trustee act 2000, which received royal assent last year, came into force on february 1st 2001.
Introductionintroduction among the many duties that fiduciaries owe beneficiaries, wards, minors and intestate heirs is the duty to hold, preserve, safeguard and invest assets under their charge. Have regard to the standard investment criteria, namely the suitability of the investments for the trust and the need for an appropriate level of asset diversification. Sections 31 and 32 trustee act 1925 shall apply with the following modifications. A trustee must also understand the interaction between investment powers and duties. The trustee act 2000 is important to trusts since it provides the default rules for the investments made by trustees. Section 4 of the act requires trustees to look at the standard investment criteria when investing. The most commonly used standard is the health, education, maintenance and support hems standard, as it is expressly referenced in internal revenue code section 2041b1a. Acting as a trustee trustee act 2000 and the investment. Professional trustees have a higher degree of standard to meet under the trustee act 2000. The information below is designed to explain ssi rules so you can. A trustee must act in the best interests of the trusts beneficiaries. In making such investments, the trustee is potentially subject to the broad prudent investor standard pertaining to trustees under prudent investor act as adopted by each particular state.
Investment standards for a trustee in a trust tld law. The trustee act 2000 a major change the trustee act 200 brings in the biggest change to trust law in england and wales for 75 years. The step standard provisions is a publication for practitioners who draft. These criteria are defined in section 43 as the need to check the. The trustee act 2000 stipulates that when managing trusts, the trustees must. Trustee act 2001 section 6 c at 18 of 2001 page 9 about whether, having regard to the standard investment criteria, the investments should be varied. This means that unless the trust deed restricts the type of investment, they are able to invest in any type of asset. There are changes that may be brought into force at a future date. The act received the royal assent on 23 november 2000 and came into force by statutory instrument on 1 february 2001. The trustee act 2000 is an act of the parliament of the united kingdom that regulates the duties of trustees in english trust law. The trustee act 2000 also provides the rules for certain duties and responsibilities of trustees. The act makes fundamental changes in the manner in which trustees can and are expected to administer property subject to a trust. Trustees are bound by the instructions in the trust deed. Trustee act 2000 is up to date with all changes known to be in force on or before 10 february 2020.
Changes and effects are recorded by our editorial team in lists which can be found in. It is deregulatory, and is intended to facilitate the administration of trusts. In england, section 1 of the trustee act, 2000 has established a welldefined statutory duty. Now, some hedge funds have registered under the investment company act as closedend investment companies, while others registered under the securities act of 1933. Rsa 2000 section 2 chapter t8 trustee act 3 c several joint trustees. Trustees duties and powers when making investment decisions. Investment powers of charities and notforprofits under. Sources of authority there are three main sources of guidance and authority for a trustee, in the following order of priority. The trustee act 2000 a major change news law gazette. For trusts that do not have wide powers of investment the trustee act 2000 provided wider powers. This sample investment policy statement ips and accompanying guidance is provided by the uk practice committee to assist practitioners in complying with the requirements under the trustee act 2000, applicable in england and wales, and other legislation such as the trustee act northern ireland 2001 where similar obligations are required. This is the trustee act 2000, which sets out the main duties and.
A trust for the benefit of a surviving spouse and children might state that the spouses needs have priority over those of the children or vice versa. The standard investment criteria are defined in terms of the suitability of the investment for the trust in question, and the need for diversification of investment. There are a number of exceptions from the trustee act 2000. Trusts ofland and appointment of trustees act 1996. What every trustee should know chapter 4 1 what every trustee should know i. The trustee act 2000 a major change the trustee act. Trustee act 2000 2000 chapter 29 an act to amend the law relating to trustees and persons having the investment powers of trustees. The trustee act 2000, and most modern trust instruments, give. Registration makes the funds available to a larger number of potential investors, including trust and employee benefit accounts. A trust is inherently an investment vehicle and the trustee has a duty to invest all trust funds as soon as possible.
The act replaced existing powers set out under the trustee investment act 1961 with a wider general power of investment. The investments a trustee can make are governed by sections 2731 of the trustee act. The charities protection and social investment act 2016, which came into effect on 31 july has introduced a statutory power for charities to make social investments. Before the 2000 act, the law identified the boundary between investments and non investments by holding that an acquisition made on behalf of a trust would only qualify as an investment if it produced direct financial benefits in the form of an income. The general rule pertaining to a trustee s power of investment is that a trust instrument can define the trustee s powers of investment. Trustee act 2000 summary investment information for.
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