EQUITY AND TRUST (LAW) Case Study Example | Topics and Well Written Essays - 1500 words

EQUITY AND TRUST (LAW) - Case pick up ExampleThe law requires that a believeee exercises the same degree of diligence that a man of ordinary prudence would exercise in the management of his affairs. In this report we shall examine the role of the legal guardians and the standard precaution he is required to take a crap in some specific instances and also the reasons for the difference in the standards of keeping in such instances in the light of established case laws and the provisions of the Trustee Act 2000. As a general rule, a trustee sufficiently discharges his duty if he takes, in managing he trust affairs, all those precautions which an ordinary prudent man of business would take in managing similar affairs of his feature- this was the court popular opinion in the appeal case of Speight v. Gaunt as early as in the year 1883. According to this settled law the standard boot that a trustee is expected to take is limited to the extent that the trustee takes all precautio ns in administering the trust assets by taking such care which an ordinary prudent man of business would be taking in his have case. The trustee is vindicated from his liability so long as he proves that he has strictly followed the covenants of the trust deed and there is no willful deviation from the purposes for which the trust properties were put to use. The trustee is not expected to use either special skill or expertise with regard to the investment of the trust properties. As has been decided in the case of Fales v. Canada Permanent Trust Co.(1977) 2 SCR 302 that of a man of ordinary prudence in managing his own affairs and traditionally the standard has been applied equally to professional and non-professional trustees. The standard has been of general application and documental. Hence traditionally there had been no distinction between professional and non professional trustees in the outlet of deciding on the standard care to be exercised by the trustees with regard to the trust properties. This was the legal baffle at a time when the investment opportunities that were available for the trust properties were limited and hence there was no major problem encountered with the administration of the trust properties. However with the passage of time the possible avenues for investments had increased and this has created superfluous responsibilities for the trustees to consider the portfolios or assets in which they contemplate to invest the trust properties and decide whether the properties would be safe in such investments. Case of Learoyd v. Whiteley (1887) 12 App. Cas.727When the trustee serves both a life tenant and a remainderman beneficiary, the trustee must invest impartially and balance the preservation of the property for the remainderman with the need to produce a presumable income for the life tenant- this was the observation made in the case of Learoyd v. Whitely (1887) as regards the fiduciary position of the trustees. This ruling al tered the degree of the standard care to be exercised by the trustees in that the responsibility of the trustee is all-inclusive to ensure that the safety of the investments is also taken into account while investing the trust property, so that the crown is not eroded. The argument of reliance by the trustee on a third person speculate to be an expert on the investments of the sort covered by the case will not set free the trustee from his fiduciary liability to the