What Is a Trustee's Duty to Beneficiaries Under BC Law?
This answer covers the law of British Columbia.
A BC trustee investing trust property must use the care, skill, diligence and judgment a prudent investor would exercise. The power to invest does not authorize investing in a manner inconsistent with the trust.
A trustee may delegate investment authority to an agent as a prudent investor could, but must set the objectives and act prudently in choosing and monitoring the agent. Delegation is not allowed where the trust requires the trustee to act personally. A trustee is not liable for an investment loss if the conduct conformed to a prudent plan or strategy with reasonable assessment of risk and return. Executors, administrators, testamentary trustees and judicial trustees must obtain a court order passing their first accounts within 2 years of the grant or appointment, unless all beneficiaries approve the accounts in writing or the court directs otherwise. On a beneficiary's notice, accounts must be passed annually.
If a trustee breaches the trust, the court may relieve them from liability if they acted honestly and reasonably and ought fairly to be excused. Duties such as avoiding conflicts come mainly from the trust document and court decisions, so a lawyer can confirm how they apply.
Key takeaways
- A trustee investing trust property must use the care, skill, diligence and judgment a prudent investor would exercise, and cannot invest in a manner inconsistent with the trust.
- A trustee is not liable for an investment loss if the conduct conformed to a prudent plan or strategy with reasonable assessment of risk and return.
- A trustee who delegates investment authority must set the objectives and act prudently in choosing and monitoring the agent, and delegation is not allowed where the trust requires the trustee to act personally.
- If a trustee breaches the trust, the court may relieve them from liability only if they acted honestly and reasonably and ought fairly to be excused.