A well-drawn trust instrument should contain the necessary and appropriate trustee powers. In the absence of instrument conferring power, recourse must be had to implied powers.
The implied powers available in the Republic of Ireland are extremely narrow and are still largely based on nineteenth-century legislation. It is proposed to update the legislation in the near future, but this had not yet been enacted as of late 2015.
There may be an express or implied power to sell the trust property. In certain cases, the trustee may be obliged to sell the trust property.
Under the formerly common trust for sale (now a trust of land), the trust required the sale of the property, typically coupled with the right to postpone the sale indefinitely, without liability. The trust for sale was commonly used as a mechanism for the creation of a trust of land, as it availed of an exception in the Settled Land Act. If there was a trust creating successive interests in land (real property), then the mandatory provision in that legislation gave primacy to the life tenant (or deemed life tenant) and displaced the trustee ’s power of sale.
Where a trustee held property under a trust for sale with power to sale, the Trustees Act granted supplemental powers in relation to the sale, unless the contrary was provided in the trust deed. The trustee may sell the property in whole or in part, by public auction or private contract on such terms as he thinks appropriate. He has a duty to obtain the best price.
A sale may not be challenged by the beneficiaries on the ground that the sales conditions were unduly depreciatory unless it appears the consideration achieved was inadequate. The purchaser is protected, provided he was acting in good faith and did not collude with the trustee/seller. Trustees are empowered to sell or sell land, with a degree of flexibility in relation to the requirements in respect of title.
The trustees may give a receipt for monies, securities and properties sold. This is a sufficient receipt and discharge to the buyer, thereby protecting him from claims in respect of the loss or misuse of the property.
The trustee of land under the Land and Conveyancing Law Reform Act has the full power of sale and power to deal with the land and property. See the separate section in respect of trustees of land.
Where there are beneficiaries, and in particular beneficiaries who are or may be entitled to the income of the trust assets, there will commonly be a power to maintain them from the trust income or capital. There is a relatively limited statutory power of maintenance, under the Conveyancing Act which allows trustees to use trust income for the maintenance or education of beneficiaries under 18, in certain cases.
Under the Conveyancing Act power, the trustees may pay the maintenance to the minor’s parent or guardian or apply it for his maintenance, education or benefit. The power applies where the assets are held on trust for the minor for life or any greater interest, whether absolutely or contingently on obtaining 18 or on the occurrence of any specified event before that age.
This particular power is available where the trust assets carry the immediate income. If the gift is a future gift or is contingent on reaching a certain age, it would not carry generally carry the income. Some types of future contingent gifts and legacies, particularly legacies and other interests arising in a deceased’s estate, may carry the present income.
Future contingent legacies are presumed to carry income in the meantime, if they are made by a testator who was a parent or guardian of a minor beneficiary unless another fund was provided for the benefit is contingent on obtaining an age greater than the age of majority. It may also carry the intermediate income, if there is an intention that the minor be maintained from it.
An application may be made to the court by a parent or other guardian of a minor, to allow payments of income or capital from trust assets, where the same are necessary for his maintenance or education. The court has inherent powers to allow the use of capital for maintenance, where there is no other means of support. The court may order the payment of trust income or capital for maintenance of the beneficiary if it is satisfied that it is beneficial and necessary for the minor’s welfare.
A power of advancement typically allows the use of trust funds to establish or assist in establishing a beneficiary in life or to contribute to his long term position in life. The power to advance out of capital is commonly conferred by trust documents. The court may sanction, an advance out of capital under the above-mentioned power for the benefit of minors.
Trustees may compromise, compound, abandon, submit to arbitration or settle any debt or claim, without being responsible for loss, provided they act in good faith under the Trustees Act and the Succession Act.
The Trustees Act provides that trustees may insure property against loss or damage by fire to an amount not exceeding three-quarters of the full value of the property. The power does not apply to property which the trustees are bound to convey absolutely to a beneficiary, on request.
The power has been updated by the Land and Conveyancing Law Reform Act 2009 [in relation to mortgagees].