,CLA2601 Assignment 2 Semester 1 2025 (Unique Number:
770920) - DUE 16 April 2025 ;100 % TRUSTED ;Complete,
trusted solutions and explanations..WE WISH YOU A
GOOD LUCK.
Question 1 Lesego and Phumudzo are the trustees of the Build
Your Own Home Trust, which carries on its business in the
construction industry. Even though the trust deed of Build Your
Own Home Trust does not explicitly authorise the trustee/s to
purchase a back actor to excavate and prepare building sites for
construction, Lesego and Phumudzo purchase a back actor for
the Trust. Considering the requirement that trustees must
preserve trust assets, discuss whether Lesego and Phumudzo
have acted lawfully. 5 marks
Introduction: Understanding the Trustee’s Duties and
Powers
In any trust, trustees are given the responsibility to manage and
administer the trust’s assets in a manner that aligns with the
interests of the beneficiaries and the terms set out in the trust
deed. Trustees owe a fiduciary duty to the trust and its
beneficiaries, which requires them to act prudently, diligently,
and within the scope of their authority.
In the case at hand, Lesego and Phumudzo are trustees of the
Build Your Own Home Trust and are faced with a situation
where they purchase a back actor (excavation equipment) for the
Trust, despite the fact that the trust deed does not explicitly
authorise them to do so. In considering whether they acted
lawfully, it is crucial to examine the duties and powers of
, trustees, the specific circumstances in which they operated, and
whether their actions were in line with trust law principles.
This analysis will explore the core issues that determine whether
Lesego and Phumudzo's actions were lawful, focusing on the
principles of trustee duties, scope of authority, and
preservation of trust assets.
1. Trustee’s Duties and Responsibilities
A trustee has a fiduciary duty to act in the best interests of the
trust’s beneficiaries. These duties are not only ethical but are
legally enforceable and ensure the trust is managed properly.
Broadly, a trustee’s duties include:
A. Duty of Loyalty and Good Faith
Trustees are required to act loyally and in good faith toward the
trust and its beneficiaries. They must avoid conflicts of interest
and ensure their decisions benefit the trust rather than their own
personal interests.
B. Duty of Prudence
Trustees must manage the trust’s assets with reasonable care,
skill, and diligence. This is often referred to as the duty of
prudence and requires trustees to make decisions that a
reasonable person would make in similar circumstances. This
includes evaluating the appropriateness of acquiring new assets
for the trust, like the back actor.
C. Duty to Act Within the Scope of Authority
770920) - DUE 16 April 2025 ;100 % TRUSTED ;Complete,
trusted solutions and explanations..WE WISH YOU A
GOOD LUCK.
Question 1 Lesego and Phumudzo are the trustees of the Build
Your Own Home Trust, which carries on its business in the
construction industry. Even though the trust deed of Build Your
Own Home Trust does not explicitly authorise the trustee/s to
purchase a back actor to excavate and prepare building sites for
construction, Lesego and Phumudzo purchase a back actor for
the Trust. Considering the requirement that trustees must
preserve trust assets, discuss whether Lesego and Phumudzo
have acted lawfully. 5 marks
Introduction: Understanding the Trustee’s Duties and
Powers
In any trust, trustees are given the responsibility to manage and
administer the trust’s assets in a manner that aligns with the
interests of the beneficiaries and the terms set out in the trust
deed. Trustees owe a fiduciary duty to the trust and its
beneficiaries, which requires them to act prudently, diligently,
and within the scope of their authority.
In the case at hand, Lesego and Phumudzo are trustees of the
Build Your Own Home Trust and are faced with a situation
where they purchase a back actor (excavation equipment) for the
Trust, despite the fact that the trust deed does not explicitly
authorise them to do so. In considering whether they acted
lawfully, it is crucial to examine the duties and powers of
, trustees, the specific circumstances in which they operated, and
whether their actions were in line with trust law principles.
This analysis will explore the core issues that determine whether
Lesego and Phumudzo's actions were lawful, focusing on the
principles of trustee duties, scope of authority, and
preservation of trust assets.
1. Trustee’s Duties and Responsibilities
A trustee has a fiduciary duty to act in the best interests of the
trust’s beneficiaries. These duties are not only ethical but are
legally enforceable and ensure the trust is managed properly.
Broadly, a trustee’s duties include:
A. Duty of Loyalty and Good Faith
Trustees are required to act loyally and in good faith toward the
trust and its beneficiaries. They must avoid conflicts of interest
and ensure their decisions benefit the trust rather than their own
personal interests.
B. Duty of Prudence
Trustees must manage the trust’s assets with reasonable care,
skill, and diligence. This is often referred to as the duty of
prudence and requires trustees to make decisions that a
reasonable person would make in similar circumstances. This
includes evaluating the appropriateness of acquiring new assets
for the trust, like the back actor.
C. Duty to Act Within the Scope of Authority
