Basic trust law question

Basic trust law question

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I understand that it is one of the fundamental principles of trust law that a trustee is not permitted to profit from the trust. Or rather, any profit that the trustee makes belongs to the trust.

Does this effectively prevent an accountant acting as both trustee and accountant for a trust and charging a commercial rate (which includes a profit element) for the provision of accountancy services, whilst retaining that element of profit personally?

Thanks

Clint Westwood

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By neileg
31st Mar 2006 09:47

Two things
I agree with David, most trust deeds include a charging clause. These are usually designed so that solicitors and accountants can charge for their services.

Even where the trust deed does not include such a clause, it is reasonable for the trustees to engage an accountant. The effect is that the accountant trustee can't charge for acting as a trustee, but can charge for acting as an accountant to the trust.

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By AnonymousUser
31st Mar 2006 12:11

Thanks to both
.

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David Winch
By David Winch
31st Mar 2006 09:01

Charging clause

Clint

I think the normal procedure is for the trust to include a charging clause, that is a clause in the Trust Deed which explicitly permits a trustee who is also a professional person (lawyer, accountant, valuer, etc) to charge his normal rates for work done for the trust.

If there is no such clause then technically I suppose an objection could be raised to a trustee who makes a profit out of fees charged to the trust. The question would then be, will anyone actually object?

If there is no charging clause it may be possible to amend the Trust Deed to introduce one, but I am not sure what the procedure would be to do that.

David

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