Breach of Trust — Trustee Duties
The Trustee Act 2000 imposes a general duty of care on trustees: they must exercise such care and skill as is reasonable in the circumstances. Specific duties include:
Remedies for Beneficiaries
Frequently Asked Questions
Can a trustee be personally liable for investment losses?
Yes — if the loss results from a breach of the investment duty. A trustee who makes imprudent investment decisions without proper advice, fails to diversify the portfolio, or ignores the investment criteria in the Trustee Act 2000 is personally liable to restore the trust fund to the position it would have been in had the correct approach been taken. However, a trustee who acts in good faith, takes proper advice, and makes reasonable decisions at the time will not be liable for losses that occur after the fact simply because the market moves against the trust.
Can I see the trust accounts as a beneficiary?
In general, beneficiaries of a discretionary trust are not automatically entitled to see trust accounts, but they can request that the trustees provide information about the trust and its management. A beneficiary with a vested or fixed interest generally has a stronger right to accounts. Where trustees refuse a reasonable request for accounts, a court application can compel the trustees to produce them. A solicitor advises on the extent of your right to information in the specific trust.
What is the limitation period for a breach of trust claim?
Under s.21 Limitation Act 1980, there is no limitation period for a claim against a trustee who is guilty of fraud or has converted trust property for their own use. For other breaches of trust, the limitation period is 6 years from the date of the breach. Where the beneficiary was a minor or had no knowledge of the breach, the period is extended. A solicitor advises on the limitation position in your specific case.
Can beneficiaries end the trust early?
Yes — under the rule in Saunders v Vautier [1841], if all beneficiaries are adults and are between them absolutely entitled to the entire beneficial interest in the trust property, they can collectively direct the trustees to transfer the trust property to them outright, bringing the trust to an end. All beneficiaries must consent. Where some beneficiaries are minor or unborn, an application to court under the Variation of Trusts Act 1958 is required for those beneficiaries' interests.
Can trustees be paid for their work?
Not automatically. An individual trustee is entitled to reimburse expenses but not to charge for their time unless the trust deed expressly authorises remuneration or the court makes a charging order. Under s.29 Trustee Act 2000, a professional trustee (someone who acts in a professional capacity) can charge a reasonable fee for services provided they are not a sole trustee and the other trustees consent. Remuneration charged without authority must be repaid to the trust.