Equity and Trust Law: Analysis of Trustee Duties and Charitable Gifts

This report delves into the core duties of trustees within the context of equity and trust law, examining their responsibilities, including the duty to adhere to the terms of the trust, act unanimously, exercise appropriate care and skill, maintain loyalty, manage the trust effectively, act personally, consider beneficiaries, and account for all activities. The report then analyzes the validity of charitable gifts from Anthony's estate, assessing whether donations to various organizations qualify for charitable status and gift aid. It evaluates the tax implications of these gifts, including the potential for claiming tax deductions. The report provides a detailed analysis of the legal and financial aspects of trust management and charitable giving.

Equity and Trust Exam

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Section A..........................................................................................................................................1
1. Core duties placed on trustees under a trust and evaluation of importance and usefulness.1
Section B..........................................................................................................................................4
2. Advising Anthony’s estate whether these gifts are likely to be held to be validly charitable.
................................................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Trust is analysed as legal entity which is created by party through which the second party
holds the right to manage the trustees assets or property for the important benefit of the third
party. Trustees is considered as legal term which implies to anyone in position of trust and a
member of voluntary or owns property, authority and responsibility for managing operations as
well as decision of trust (Chiu and et.al., 2012). In present scenario, core duties which are
placed on trustees within a trust are discussed along with the importance and usefulness.
Different provisions of amount paid for charity have been discussed in this report. These
important provisions will provide understand about the concept of charities and Gift Aid.
Section A
1. Core duties placed on trustees under a trust and evaluation of importance and usefulness.
A trustee has been analysed as an entity or individual which is formally appointed for
management of assets of a particular or voluntary business enterprise for the benefit of its
beneficiaries in accordance with the terms of trust. In this context, there are fiduciary duties
which are provided to trustees towards the beneficiaries. Further, these essential duties have
been set out in the trust deeds and important statement provided statutory legislations. Duties are
powers of trustees have been listed according to the proper law through which the trust is
governed (Bock and et.al, 2012). In addition to this, trustee always have some fiduciary duties as
well as obligations. This actual means that the trustees are required to act in the good faith in the
interest of beneficiaries rather than acting for the collateral purpose. Some core duties are
mentioned above:
Duty to the terms: Every trustee is responsible to know and adhered the terms and conditions of
the trust which are formulated for smooth regulation of operations. These important rules and
regulation are mainly described in the trust deeds (Hoehle, Huff and Goode, 2012). Adherence
to the terms and conditions is important for trustees to carry out smooth operations and
increasing image of trust in country. Usefulness of this adherence and having knowledge about
the terms will also enable trustee in understanding their discretions and power as well as rights
which are available to them within a trust.
Duty to act unanimously: In case of private trust, it is the general rule is that where there is
more than one trustee they will have to exercise their functions, act unanimously. It is also
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identified that majority of trustees does rule against the minorities. Moreover, the underlying
principle which is requiring the unanimity always seems to be mediator in appointing a number
of trustees in order to execute the trust set by trustees. This duty is important for managing
operations of trust and resolving critical situations in appropriate manner.
Duty to exercise appropriate care and skill:
Trustees are expected to reach at certain level and standards which helps the trust in
gaining funds. It will not provide benefit to the incompetent trustee who is responsible for loss
to trust fund or beneficiaries by arguing that duties are performed honestly but results are in
losses (Joubert and Van Belle, 2013). In management, when trustee fails to apply or exercise
required competency and skill then it will consider as breach of trust and will be liable for
consequences of that breach. It is important for trustees to exercise their skills as it helps in
accomplishment of objective of trust and useful for completion of task in appropriate manner.
Duty of loyalty:
It is the most important fact that trustees have major fiduciary duties towards the
beneficiaries or public. They must control and manage the trust solely within the interest of trust
beneficiaries and they must not take in any interest in the conflict with the beneficiaries. It is
also important that they must benefits themselves from their roles as trustees other than the fees
that usually receives from their trusteeship. It is considered as important for avoiding conflicts
between beneficiaries and trustee by increasing their loyalty towards each other. Loyalty
towards beneficiaries is useful for motivating them and also helps in providing care facilities to
needy person.
Duty to manage the trust appropriately
Another important responsibility of trustee is controlling and managing the trust
efficiently. For this, they need to be familiar with the terms and conditions of trust, assets and
liabilities, situations or circumstance of people or beneficiaries and the purpose of trust.
Effective management systems are required to be in place as it helps trustees to ensure that
appropriate decisions have been made in timely and appropriate manner. It has been done by
considering the terms of trust and important interests of trustees (Pearson, 2013). Managing
trust is considered as important for analysing the applicability of organisation to deal with
different alternative at workplace. Through this, trustees will be able to analyse the situations of
beneficiaries and develop effective communication in relation to the parties and appropriate
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record keeping. Further, trustees are also having duties to make investments appropriately or
prudently on the behalf of trust and it should also diversify funds of the trust assets within the
interest of beneficiaries.
Duty to act personally
As per analysis, trustees also acts personally and they are also involved in making
important decisions in respect to the terms of trust. Moreover, they are also permitted for
involving advisors such as financial advisors and the lawyers but the ultimate decision related to
specific matters of trust have been taken by trustees. In some circumstances, these trustees often
provide responsibilities and authorities to the third parties through the transfer of trust deeds of
delegation and attorney (José Liébana-Cabanillas, Sánchez-Fernández and Muñoz-Leiva, 2014).
For example: delegation of power to an agent for purchasing and selling the property overseas.
Moreover, trustees are also obliged towards the proper instructions and supervising the major
trust agents. These are duty to act personally is important for trustees to manage the operations
and increasing value of trust and cooperation. This responsibility in useful in analysing the skills
and competencies of agents and other members who are involved in trust. Through delegation of
responsibilities, trustees can also be their by decision making. They will also not follow the
instruction of the settler but they will give considerations to the wishes of the settler which are
not binding unless included in the terms of contract.
Duty to consider beneficiaries:
A trustee must be impartially with respect to the beneficiaries in their decision making.
They will also need to follow the instructions of settler but it may provide consideration to the
wishes of the settlor which are not binding unless involved in the terms and provisions of trust.
Duty to account:
It is fidicuary duty of the trustees to maintain and control the accounts of trust as well as
important records. They also need to provide respect to beneficiaries rights are associated for the
trust important information as discussed in the provisions. Maintaining the accounts of trust to
provide information and understanding amount which are used by trust for operations and funds
which are achieved from different sources (Tax relief when you donate to a charity, 2017).
Appropriate financial reports are made by trustees which are useful for analysing the progress of
trust. This is an important method for beneficiaries as they will also get opportunities to share
their ideas for managing operations of trusts in appropriate manner.
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Section B
2. Advising Anthony’s estate whether these gifts are likely to be held to be validly charitable.
(a) Training for life is analyzed as charitable organization which is registered charities act 2011
which usually works for the benefit of young and needy people who are unemployed for over
one year. Donating though Gifts Aid means the charities and communities young unemployed is
not considered as charitable on the ground of provisions under charity act 2011(Lucassen and
Schraagen, 2012). However, it is also stated that Anthony's estates can claim 25p for every £1
they have provided as charity. Moreover, charities can claim gift aid on most of the donations but
some payments do not qualify for the payments. Therefore, it is clear that the amount is
£500,000 is not considered as charitable but Anthony's estate has rights to claim for 25 percent
against the amount which they have provided as Gift Aid which is amount to £1,25000.
(b)
Gift Aid is analyzed as UK tax incentive that enables tax effective giving by the
individual to the charities in UK. It has been introduced in the finance act 1990 for donation
given after but was originally limited to the cash gifts of £600 or more. From the above
statement, it is clear that the amount of £1,000,000 to Cancer Research UK which is transferred
by the Anthony estate is considered as Gift Aid rather charitable (Cordery, 2013). Therefore, it is
advised to the estate that they are able to claim the amount £25Paise as tax deduction for every
£1 they have provided as Gift Aid. Donations which are provided by the organizations as charity
are considered tax free except some payments. Things that does not qualify for gift Aid such as
Any fees have been charged for ticket for performance or a sport event, things which are bought
by estate, competition etc. By making claims for gift aid , the extra amount of 25% could fund
the cancer research for an extra 15 minutes. Through this, at not extra cost to estate, the extra
255 income will allow the estate to find out more about the cancer than ever before by providing
food for the stem cells to grow in the lab.
(c)
Regulations state the schools and universities can usually reclaim the basic rate of tax on
donations. This means that they get more value from the each donation without the donor having
to pay any extra amount (Morgan and Fletcher, 2013). If the individual or donate to school or
university it is considered as gift aid declaration they can increase the value of their donation/.
Under the government regulations that aims to benefit the charities,schools and can reclaim the
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additional tax they usually paid against the donation. From this, it can be stated that the amount
of £3,000,000 which is transferred by Anthony estate to Heaton private school is considered to
be Gift Aid. Basically, they can claim a 25p from the Inland Revenue for every pound they have
donated to the school. It has been analyzed that these provisions have provided clear
understanding about the provisions of charity.
(d) Donation by organization's or individual or to the community amateur sports clubs are
considered tax free. It is usually considered as charity for the estate of Anthony and it will not be
involved in their income (Morgan, 2012). The amount which is transferred by Anthony's trust to
the sports clubs around the country, to be the custom designed for some teenagers so that the
youngsters will have place to associate with each other is considered as validly charitable. It is
important for the estate of Anthony to consider these provision as it helps in filing them tax
deductions. This is considered as tax relief which is right of organization or individual if they
have provided for amateur sports club.
CONCLUSION
From the above analysis, it is concluded that trust is analyses as legal entity which is
made by individual for the purpose of providing support to public. Trustees are also analyzed as
legal individuals which are appointed for controlling and managing the operations of trust. There
are various important roles and responsibilities. It is fiduciary duty of the trustees to maintain and
control the accounts of trust as well as important records. They also need to provide respect to
beneficiaries rights are associated for the trust important information as discussed in the
provisions.
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REFERENCES
Books and Journals
Bock, G.W., Lee, J., Kuan, H.H. and Kim, J.H., 2012. The progression of online trust in the
multi-channel retailer context and the role of product uncertainty. Decision Support
Systems, 53(1), pp.97-107.
Chiu, C.M., Hsu, M.H., Lai, H. and Chang, C.M., 2012. Re-examining the influence of trust on
online repeat purchase intention: The moderating role of habit and its antecedents.
Decision Support Systems, 53(4), pp.835-845.
Cordery, C., 2013. Regulating small and medium charities: Does it improve transparency and
accountability?. Voluntas: International Journal of Voluntary and Nonprofit
Organizations, 24(3), pp.831-851.
Hoehle, H., Huff, S. and Goode, S., 2012. The role of continuous trust in information systems
continuance. Journal of Computer Information Systems, 52(4), pp.1-9.
José Liébana-Cabanillas, F., Sánchez-Fernández, J. and Muñoz-Leiva, F., 2014. Role of gender
on acceptance of mobile payment. Industrial Management & Data Systems, 114(2),
pp.220-240.
Joubert, J. and Van Belle, J., 2013. The role of trust and risk in mobile commerce adoption
within South Africa. International Journal of Business, Humanities and Technology,
3(2), pp.27-38.
Lucassen, T. and Schraagen, J.M., 2012. Propensity to trust and the influence of source and
medium cues in credibility evaluation. Journal of information science, 38(6), pp.566-
577.
Morgan, G.G. and Fletcher, N.J., 2013. Mandatory public benefit reporting as a basis for charity
accountability: Findings from England and Wales. VOLUNTAS: International Journal of
Voluntary and Nonprofit Organizations, 24(3), pp.805-830.
Morgan, G.G., 2012. Public benefit and charitable status: assessing a 20-year process of
reforming the primary legal framework for voluntary activity in the UK. Voluntary
Sector Review, 3(1), pp.67-91.
Pearson, S., 2013. Privacy, security and trust in cloud computing. In Privacy and Security for
Cloud Computing (pp. 3-42). Springer, London.
Online
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Tax relief when you donate to a charity, 2017. [Online]. Available
through:<https://www.gov.uk/donating-to-charity/gift-aid >
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