The Trustee Bill, before parliament in 2000, will make the biggest changes to trustee law since 1925. There are six main parts to the bill.
The first part imposes a duty of care on the trustees. A trustee must exercise such skill and care as is reasonable in the circumstances. This new provision includes pension fund trustees. It also affects directors generally, as they act as quasi-trustees in relation to company property.
The second part gives the trustees the same powers of investment as if they were the beneficiaries of the assets. This sweeps away a collection of historic restrictions and replaces them with the new duty of care.
The third part relates to property. This largely restates existing law, though the scope of land is extended to cover the whole of the UK.
The fourth part deals with agents, nominees and custodians. At present, trustees cannot usually vest property with a nominee nor put trust property in the custody of a custodian. This has produced problems in share dealing and in other areas. The Bill allows property to be placed with a custodian or nominee who is in business as such.
The fifth part addresses remuneration. It allows a paid trustee to be paid for all work reasonably undertaken, even when it could have been done by a lay trustee. The rule that a charging clause in a trust deed must be strictly construed against the paid trustee is nullified.
The final part deals with miscellaneous matters, including giving trustees a general power to insure trust assets for their full value against all risks.
[2000]