New law gives trustees extra fund-raising powers

New legislation will come into force this week aimed at allowing trustees, including those representing charities, to take advantage of a fuller range of investment opportunities and to have easier access to professional advice and expertise.

The Trustee Act (NI) 2001 will assist not only professional trustees but also those acting as trustees for charities and other similar bodies.

At present, some older trustee relationships may be at a disadvantaged, having not benefited from recent provisions. More modern trustees usually have powers and duties provided for in the Act, but when it becomes law restrictions and obstacles facing older trustees will be removed – offering a level playing field to all.

The core reform that the Act will give trustees a wider power of investment than they enjoy under the current law. The Act also creates new powers for trustees to appoint agents, nominees and custodians to act on their behalf in dealing with trust property. The Act also repeals earlier legislation, restricting trustees in the way in which they could invest trust property.

Additionally, there will be more extensive powers for trustees to buy land, insure trust property and to pay remuneration to trustees who are carrying out duties in a professional capacity. In certain circumstances, beneficiaries will be able to appoint or replace trustees.

The Act creates a statutory duty of reasonable care, which trustees will have to comply with when exercising a range of functions.

The legislation applies to trusts created in the future and existing trusts, but it will not apply against the wishes of the person who set up the trust. It may also apply to persons who are not technically trustees but have powers of investment based on trustee powers.

(GMcG)