Trusts and Trustees Act (Cap. 331), article 21

21. (1) Trustees shall in the execution of their duties and the exercise of their powers and di scretions act with the prudence, diligence and attention of a bonus paterfamilias , act in utmost good faith and avoid any conflict of interest. (2) ( a) Subject to the provisions of this Act, trustees shall carry out and administer t he trust according to its terms; and, subject as aforesaid, the trustees shall ensure that the trust property is vested in them or is under their control and shall, so far as reasonable and subject to the terms of the trust, safeguard the trust property from loss or damage: Provided that the granting of security by assignment or pledge as authorised by the terms of the trust is permitted: Provided further that the transfer by the trustee of trust property to a legal entity w holly owned or controlled, directly or indirectly, by the trustee or to another trust of which he is the sole trustee or to another trustee under trusts for the sole benefit of the trustee, shall be permitted and in such case the duties and liabilities of the trustee under this Act or the deed of trust shall not be diminished or otherwise affected in any manner whatsoever. (b) Trustees shall, when accepting their appointment, draw up in writing an inventory and shall declare that the inventory includes all the tr ust property and of which the incoming trustee is aware. (3) Except as permitted by this Act or as expressly provided by the terms of the trust, a trustee shall not, without the author ity of the court - (a) directly or indirectly profit from the trusteeship; or (b) cause or permit any other person to profit directly or indirectly from th e trusteeship; or (c) enter into any transaction related to trust property on his own account; or (d) enter into any transaction re lated to trust property with 20 CAP. 331.] TRUSTS AND TRUSTEES a person related to him by affinity or consanguinity in the direct line or up to the t hird degree in the collateral line or with a partner in any partnership; or (e) generally enter into any transaction related to trust property that may give rise to a conflict of interest. (4) (a) Trustees shall keep accura te accounts and records of their trusteeship and shall, upon a request by any beneficiary, disclose such accounts and records to such beneficiary and shall, subject to the terms of the trust, provide a copy of such accounts within a reasonable time of a request: Provided that it shall be lawful for a beneficiary to suspend such rights in favour of an independent third party in cases where the beneficiary is required to do so by any agreement or by law as a result of any existing or potential conflict of interest, and this for such time as the said conflict of interest subsists and under such conditions as may be agreed or are otherwise applicable. (b) Trustees shall be obliged to keep such accounts and records for a period of not less than ten years from the date of the termination of the trust or the trusteeship, whichever event occurs earlier. (5) Trustees shall keep trust pro perty distinct and separate fro m their own property as well as from any other property held by t hem under any other trust or title, and separately identifiable the refrom: Provided that trustees may, if expressly permitted by the terms of the trust, or in any cas e where the trust property con sists of fungible things, place and keep t rust property in a common pool of identical assets or in a cl ients’ or common account. (6) Trustees shall not enjoy any benefits under any trust of which they are the sole trust ee without the prior authority of - (a) the Authority, in case of a trustee authorised in terms of article 43 or not required to be authorised in terms of article 43(6); or (b) the Court, in any other case: Provided that in case of an express fixed trust in favour of the trustee, only prior notification in writing to the Authorit y shall be required: Provided further that a transfer of property by the trustee to another trust of which he is the sole trustee or sole beneficia ry, shall not be deemed to be a benefit under this subarticle: Provided further that remunera tion for acting as a trustee or indemnification for expenses, liabilities and other claims shal l not be treated as a benefit under a trust: Provided further that this subarticle shall not apply to a trustee holding property in rela tion to a commercial transactio n. (7) Notwithstanding the provisions of this Act and other TRUSTS AND TRUSTEES [CAP. 331. 21 provisions which cannot be derogated from by voluntary act, whe n a commercial transaction include s the appointment of a trustee to hold property in relation to such transaction, the duties and l iabilities of trustees as stated in this Act shall be regulated by the pro visions of this Act or any applicable legis lation unless varied by the ter ms of the trust: Provided that nothing in this subarticle shall permit a trustee to be exonerated from the effects of, or be indemnified for, his own fraud, wilful misconduct or gross negligence. (8) In the case where one of the beneficiaries of a trust is su bject to tutorship or curatorship, the trustee shall, as the case may be, seek directions from the Court in the execution of his duties and sh all be obliged to comply with any directions so given by the Court. Co-trustees. Amended by: XIII. 2004.21.