Breach of trust
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Whether you’re navigating the challenges of a potential breach of trust, seeking clarity on a trustee’s duties, or looking for expert guidance on any trust-related matter, Moore Barlow and our expert private wealth lawyers are here to guide and support you. Our dedicated team is committed to ensuring you’re well-informed and confident in every decision you make.
What constitutes a breach of trust?
A breach of trust takes place when a trustee fails to adhere to the trust’s stipulations or their own fiduciary responsibilities. Trustees bear collective and individual accountability for any trust violations that result in financial detriment to the beneficiaries.
What is a breach of trust?
A breach of trust refers to a violation of the duty or responsibility placed on someone to act in the best interest of another party. It typically involves a betrayal of confidence, such as misappropriation of funds, failure to fulfil obligations, or unauthorised use of assets.
What are a trustee’s duties?
A trustee has several important duties that they must fulfil. These duties include:
- Duty of loyalty: A trustee must act in the best interests of the beneficiaries and avoid any conflicts of interest. They must balance the beneficiaries’ needs and not use their position for personal gain.
- Duty of care: A trustee must exercise reasonable care and skill in managing the trust assets. This includes making informed decisions, conducting research, and seeking professional advice when necessary.
- Duty to follow the terms of the trust: A trustee must adhere to the instructions and provisions outlined in the trust document. They must distribute assets according to the trust’s terms and manage the trust in accordance with its purpose.
- Duty to act impartially: A trustee must treat all beneficiaries fairly and impartially. They must not favour one beneficiary over another unless specifically instructed to do so in the trust document.
- Duty to keep accurate records: A trustee must maintain detailed and accurate records of all trust transactions, including income, expenses, and distributions. These records should be available for beneficiaries to review upon request.
- Duty to communicate with beneficiaries: A trustee has a duty to keep beneficiaries informed about the trust’s administration and provide regular updates on the trust’s financial status. They must also respond to beneficiaries’ enquiries and provide necessary information.
- Duty to prudently invest trust assets: A trustee must invest trust assets in a prudent manner, considering the needs of the beneficiaries and the long-term growth of the trust. They should diversify investments and avoid unnecessary risks.
It is important to note that these duties may vary, depending on the specific terms of the trust and other factors. Consulting with qualified lawyers such as Moore Barlow is recommended to fully understand the trustee’s duties in a particular situation.
What is the required standard of care? (Section 1 of the Trustee Act 2000)
Under Section 1 of the Trustee Act 2000, trustees must exercise such care and skill as is reasonable in the circumstances when carrying out their duties. The required standard depends on whether the trustee is:
- A lay trustee (non-professional) – Expected to act with reasonable care, using the skill and knowledge they possess.
- A professional trustee – Held to a higher standard, expected to apply their specialist expertise and professional experience.
This duty of care applies to investment decisions, managing trust assets, and exercising trustee powers. Failing to meet this standard can result in liability for breach of trust. Seeking legal advice ensures trustees understand and comply with their responsibilities.
Our team of private wealth disputes solicitors
Trusts can be intricate, and having a firm grasp on your rights and responsibilities is vital.
Whether you’re navigating the challenges of a potential breach of trust, seeking clarity on a trustee’s duties, or looking for expert guidance on any trust-related matter, Moore Barlow and our expert private wealth lawyers are here to guide and support you. Our dedicated team is committed to ensuring you’re well-informed and confident in every decision you make.
Why choose our solicitors to help with breaches of trust?
At Moore Barlow, our solicitors have extensive experience in handling complex and delicate disputes, offering personalised guidance and practical solutions to safeguard your interests. With a deep understanding of the intricacies involved in breach of trust cases, we employ a collaborative and strategic approach to achieve the most favourable outcome for you. Trust us to navigate the legal complexities and protect your rights.
How can our solicitors assist you with a breach of trust?
Our solicitors are specialists in resolving disputes arising from breaches of trust We provide tailored advice and representation to individuals and families facing breach of trust issues, particularly in cases involving inheritance, trusts, and estates. Our team adopts a proactive and strategic approach to achieve the best possible resolution for our clients, whether through negotiation, mediation, or litigation. We understand the emotional impact of these disputes and strive to provide a supportive and empathetic service throughout the process.
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Breach of trust – FAQs
How do you deal with a breach of trust?
We understand the seriousness of a breach of trust. Our experienced lawyers will carefully assess the situation, gather evidence, and develop a strategic plan to protect your rights and seek appropriate remedies. We will guide you through the legal process, advocating for your best interests and working towards a resolution that restores trust, whenever possible.
How do you prove a breach of trust?
To prove a breach of trust, you need to establish that a fiduciary duty existed, that duty was breached, and the breach caused loss. Evidence such as documents, communications, and witness statements can be used to demonstrate the breach and its consequences.
What is an example of a breach of trust?
An example of breach of trust is when a trustee misuses trust funds, such as investing in high-risk assets without beneficiary consent or using funds for personal gain. Other breaches include failing to distribute assets correctly, acting with bias, or neglecting legal duties, which can lead to legal consequences.
What are the possible defences to a breach of trust claim?
A trustee facing a breach of trust claim may have several legal defences, including:
- Acting in Good Faith – If the trustee acted honestly and in the best interests of the trust, even if the outcome was unfavourable, they may not be held liable.
- Beneficiary Consent – If beneficiaries were fully informed and agreed to the trustee’s actions, this may serve as a defence.
- Exemption Clauses – Some trust deeds include clauses limiting trustee liability unless fraud or gross negligence is involved.
- Court Approval – If a trustee followed a court order or legal guidance, they may not be responsible for any resulting losses.
- Lack of Causation – If the trustee’s actions did not directly cause financial loss, they may not be liable for damages.
- Statutory Relief (Section 61, Trustee Act 1925) – The court may excuse a trustee from liability if they acted honestly, reasonably, and ought fairly to be excused.
If accused of a breach of trust, seeking expert legal advice is essential to build a strong defence and protect your position.
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