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Consultation Paper on Trust Law General Proposals

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Consultation Paper on Trust Law General Proposals __________ CONSULTATION PAPER ON TRUST LAW GENERAL PROPOSALS __________ (LRC CP 35– 2005) IRELAND The Law Reform Commission 35-39 Shelbourne Road, Ballsbridge, Dublin 4 © Copyright The Law Reform Commission 2005 First Published February 2005 ISSN 1393 – 3140 ii THE LAW REFORM COMMISSION Background The Law Reform Commission is an independent statutory body whose main aim is to keep the law under review and to make practical proposals for its reform. It was established on 20 October 1975, pursuant to section 3 of the Law Reform Commission Act 1975. The Commission’s Second Programme for Law Reform, prepared in consultation with the Attorney General, was approved by the Government and copies were laid before both Houses of the Oireachtas in December 2000. The Commission also works on matters which are referred to it on occasion by the Attorney General under the terms of the 1975 Act. To date, the Commission has published seventy one Reports containing proposals for reform of the law; eleven Working Papers; thirty four Consultation Papers; a number of specialised Papers for limited circulation; An Examination of the Law of Bail; and twenty five Annual Reports in accordance with section 6 of the 1975 Act. A full list of its publications is contained in the Appendix to this Consultation Paper. Membership The Law Reform Commission consists of a President, one full-time Commissioner and three part-time Commissioners. The Commissioners at present are: President The Hon Mr Justice Declan Budd High Court Full-Time Commissioner Patricia T Rickard-Clarke Solicitor Part-Time Commissioners Dr Hilary A Delany, Barrister-at-Law Senior Lecturer in Law, Head of Law School, Trinity College Dublin iii Professor Finbarr McAuley Jean Monnet, Professor of European Criminal Justice, University College Dublin Marian Shanley, Solicitor Secretary John Quirke Research Staff Director of Research Raymond Byrne BCL, LLM, Barrister-at-Law Legal Researchers Deirdre Ahern LLB, LLM (Cantab), Solicitor Alan Brady LLB, LLM (Lond), Attorney-at-Law (New York) Ronan Flanagan LLB, LLM (Cantab) Roberta Guiry BCL, LLM (NUI) Orla Joyce BCL, LLM (Cantab) Sinéad Ring BCL (Law & German), LLM (NUI) Mary Townsend BCL, LLM (NUI) Aisling Wall BCL, LLM (Cantab) Administration Staff Project Manager Pearse Rayel Legal Information Manager Conor Kennedy BA, H Dip LIS Cataloguer Eithne Boland BA (Hons) H Dip Ed, H Dip LIS Executive Officer Denis McKenna Private Secretary to the President Liam Dargan iv Clerical Officers Alan Bonny Debbie Murray Principal Legal Researchers on this Consultation Paper Patricia Brazil LLB, Barrister-at-Law Rosemary Healy-Rae AITI, Barrister-at-Law Further information can be obtained from: The Secretary The Law Reform Commission 35-39 Shelbourne Road Ballsbridge Dublin 4 1. Telephone (01) 637 7600 Fax No (01) 637 7601 Email [email protected] Website www.lawreform.ie v TABLE OF CONTENTS INTRODUCTION.......................................................................................................1 CHAPTER 1 THE OFFICE OF TRUSTEE...................................................11 A Introduction......................................................................................................11 B Capacity and Suitability to Act as a Trustee...................................................12 (1) The Position in Ireland ............................................................................12 (2) Other Jurisdictions...................................................................................14 (3) Options for Reform..................................................................................17 C Number of Trustees .........................................................................................25 (1) The Position in Ireland ............................................................................25 (2) Other Jurisdictions...................................................................................27 (3) Options for Reform..................................................................................31 D Disclaimer........................................................................................................38 E Appointment ....................................................................................................40 (1) The Position in Ireland ............................................................................40 (2) Other Jurisdictions...................................................................................45 (3) Options for Reform..................................................................................51 (4) Charities...................................................................................................66 F Retirement........................................................................................................67 (1) The Position in Ireland ............................................................................67 (2) Other Jurisdictions...................................................................................68 (3) Options for Reform..................................................................................70 G Removal...........................................................................................................74 (1) The Position in Ireland ............................................................................74 (2) Other Jurisdictions...................................................................................76 (3) Options for Reform..................................................................................79 H Disqualification................................................................................................85 (1) The Position in Ireland ............................................................................85 (2) Other Jurisdictions...................................................................................85 (3) Options for Reform..................................................................................88 I Suspension .......................................................................................................91 (1) The Position in Ireland ............................................................................91 (2) Other Jurisdictions...................................................................................91 (3) Options for Reform..................................................................................91 CHAPTER 2 REMUNERATION OF TRUSTEES.......................................93 A Introduction......................................................................................................93 B The Position in Ireland ....................................................................................93 C The Position in England and Wales ................................................................95 D Other Jurisdictions.........................................................................................101 (1) Northern Ireland ....................................................................................101 (2) Scotland .................................................................................................101 (3) Australia.................................................................................................103 (4) Canada ...................................................................................................103 (5) New Zealand..........................................................................................104 (6) United States..........................................................................................105 vi E Options for Reform........................................................................................105 CHAPTER 3 DUTY OF CARE .....................................................................111 A Introduction....................................................................................................111 B The Position in Ireland ..................................................................................112 C The Position in England ................................................................................114 (1) Trustee Act 1925 ...................................................................................114 (2) Trustee Act 2000 ...................................................................................117 D The Position in Scotland................................................................................119 E Options for Reform........................................................................................122 (1) What should be the standard of the duty of care?.................................123 (2) Distinguishing between professional and non-professional trustees....126 F Provisional view of the Commission ............................................................128 G Charities.........................................................................................................129 (1) The Position in Ireland ..........................................................................129 (2) England and Wales ................................................................................129 (3) Scotland .................................................................................................131 (4) Options for Reform................................................................................132 CHAPTER 4 POWERS OF INVESTMENT ...............................................137
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