Source: Taxation In Australia Journal Article
Published Date: 1 Oct 2017
The duty of a trustee to invest is a broad duty which requires the trustee to exercise a level of care, diligence and skill not just when deciding to make such an investment, but also when monitoring and managing that investment for the life of the investment. It is a duty which has the potential, where a trustee makes a poor investment, to expose not just the trustee to a suit from the beneficiaries, but also a tax adviser to a suit or cross-claim from his or her own client (the settlor of the trust) and possibly the beneficiaries. There are, however, means of minimising the risks associated with a trustee's duty to invest, both from the perspective of a trustee and the settlor's tax adviser. This article examines the foundation of a trustee's duty of care in equity, and then outlines suitable risk minimisation strategies.
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