Trustees of a trust have a fiduciary duty

The duties of trustees arise through the provisions of the Trust Property Control Act, the common law and the trust deed. All trustees—whether independent or not—are charged with the responsibility of ensuring that the trust functions properly to the greatest benefit of the beneficiaries. These responsibilities include, but are not limited to:
·       Ensuring compliance with the provisions of the trust instrument
·       Ensuring compliance with all statutory requirements
·       Conducting of proper trustee meetings
·       Recording of proper minutes of all meetings and decisions by the trustees. The focus should not be on the keeping of minutes, but on the decisions reached. A trust operates on the resolutions of its trustees and it is important that these should be recorded.
·       Proper maintenance and safekeeping of minute books
In carrying out their duties, trustees fulfil a fiduciary position. A fiduciary duty is an onerous, legal obligation of a person managing the affairs of another to act in the best interest of such a person. A fiduciary relationship arises from the nature of the actual relationship undertaken; i.e. in the instance of a trust the trustees should act in the best interests of the beneficiaries.
A trustee therefore has to be more careful and cautious with the affairs of the trust than he would be with his own affairs. Whereas a person can take personal risks in managing his, her or its own investments and affairs, he, she or it has to take greater care when dealing with trust assets, and avoid any business risk as far as possible (Sackville West v Nourse case of 1925). This view was confirmed in the Estate Richards v Nichol case of 1999 that a person in a fiduciary position, such as a trustee, is obliged to adopt the standard of the prudent and careful person. Trustees cannot exempt themselves from their fiduciary duties.
In carrying out their fiduciary duties, trustees must:
·       be committed to find common ground on disputed matters as they are required to act jointly, being the joint owners of trust assets
·       always act in the utmost good faith (honesty or sincerity of intention with no intent to defraud, act maliciously, or take unfair advantage of their positions)
·       give effect to the provisions of the trust instrument
·       act in the best interests of all beneficiaries, both existing and future and not only act in the best interest of a particular beneficiary. Care should be taken when the founder is also one of the beneficiaries.
·       avoid personal advantage or benefit, such as secretly making money out of the trust
·       avoid conflict of interest with the trust, such as being involved in competing activities with the trust and using confidential trust information to his, her or its advantage
·       avoid exercising their powers for an improper (unacceptable) purpose, such as benefiting themselves or others not envisaged in the trust instrument
·       account to beneficiaries, even in a discretionary trust. Trustees must maintain proper accounts and be in a position to account to beneficiaries when requested to do so (Doyle v Board of Executors case of 1999 and Mia v Cachalia case of 1934).
When there has been a breach by a trustee of a fiduciary duty, the beneficiary may claim the trustee’s gain out of a transaction, or may hold the trustee liable for breach of trust, even if the trustee did not financially benefit.