The trustees are in charge of managing a significant fund in discretionary trusts for the children and grandchildren of the settlor. However, they feel that they lack the necessary experience to handle the responsibility effectively. Therefore, they are looking to delegate their role to someone who is more qualified and capable.
Which of the following statements accurately describes the extent of trustees' powers of delegation?
The trustees are in charge of managing a significant fund in discretionary trusts for the children and grandchildren of the settlor. However, they feel that they lack the necessary experience to handle the responsibility effectively. Therefore, they are looking to delegate their role to someone who is more qualified and capable.
Which of the following statements accurately describes the extent of trustees' powers of delegation?
They may delegate investment decisions to an investment manager and will not be liable if they follow the procedures laid down by statute.
B) The trustees have the authority to delegate investment decisions to an investment manager, and they will not be held responsible if they follow the procedures outlined by statute. A trustee can delegate administrative functions and investment decisions to an investment manager, but they must consider the requirements specified in the Trustee Act 2000.
Option (A) is incorrect because trustees are generally not allowed to delegate their discretion, but they may delegate their discretion to choose investments in exceptional cases.
Option (C) is incorrect because trustees can delegate their entire office by power of attorney. However, they can only do so for a maximum of 12 months.
Option (D) is incorrect because trustees are not accountable for the actions of their duly appointed investment manager as long as they comply with the procedures established by statute and act reasonably in all circumstances.
Option (E) is incorrect because although trustees have a duty to seek advice, they may delegate their investment decisions.