Trustee Act 2000

Summary

The Trustee Act 2000 modernised the powers and duties of trustees in England & Wales. It replaced the narrow 'prudent man of business' standard with a statutory duty of care, introduced a general power of investment, widened powers to acquire land, and created a framework for delegating trustee functions. It applies as a default to most express trusts unless excluded by the trust instrument.

Key Points

• Statutory duty of care — trustee must exercise such care and skill as is reasonable in the circumstances (s.1, Schedule 1)
• General power of investment — trustees may make any kind of investment as if absolutely entitled to the trust assets (s.3)
• Standard investment criteria — suitability and diversification (s.4)
• Duty to obtain and consider proper advice on investments (s.5)
• Power to acquire freehold or leasehold land in the UK (s.8)
• Power to appoint agents, nominees, and custodians (Part IV)
• Remuneration of professional trustees (s.29)
• Trust instrument may restrict or exclude the statutory provisions (s.9)
• Statutory duty of care: skill and care reasonable in the circumstances (s.1, Sch.1)
• General power of investment — as if absolutely entitled to trust assets (s.3)
• Duty to have regard to standard investment criteria (s.4)
• Power to acquire freehold or leasehold land (s.8)
• Power to delegate to agents, nominees, and custodians (Part IV)
• Power to insure trust property (s.34)

Parts & Sections

Amendments History

Frequently asked questions

Does the Trustee Act 2000 apply to all trusts?

The Trustee Act 2000 applies as a default to most express trusts in England and Wales unless the specific trust instrument excludes or restricts these provisions. It modernised trustee powers by replacing the old 'prudent man of business' standard with a statutory duty of care and introducing a general power of investment.

What standard of care must a trustee follow?

Under the statutory duty of care, a trustee must exercise such care and skill as is reasonable in the circumstances. This standard specifically considers any special knowledge or experience the trustee has or claims to have. If the trustee acts in a business or professional capacity, the duty also accounts for the knowledge and experience reasonably expected of someone in that role.

What investment powers do trustees have under the Act?

The Act grants trustees a general power of investment, allowing them to make any kind of investment they could make if they were absolutely entitled to the trust assets. This replaced previous restrictive lists of authorised investments. However, trustees must have regard to standard investment criteria, specifically the suitability of the investment and the need for diversification.

Do trustees need to get advice before making investments?

Before exercising any power of investment, a trustee is required to obtain and consider proper advice on how that power should be exercised. The only exception is if the trustee reasonably concludes that obtaining such advice is unnecessary or inappropriate for the specific situation.

Can trustees delegate their duties to other people?

Yes, the Act provides a framework for trustees to delegate certain functions. Specifically, Part IV of the Act grants trustees the power to appoint agents, nominees, and custodians to assist with the administration of the trust. This allows for more flexible management of trust assets and duties.