What is General Power of Investment?
Defined by the Trustee Act 2000, the General Power of Investment grants trustees the rather superhero-like ability to invest trust assets as if they were the outright owners of said assets. This power dramatically broadens their investment horizon, previously confined to merely a list of authorized investments. Think of it as being handed the financial infinity gauntlet, but with great power comes great responsibility — and some remaining legal bounds.
Scope and Limitations
While the General Power of Investment empowers trustees with the flexibility to explore various investment adventures, it’s not a free-for-all treasure hunt. Investments in land, for example, remain slightly shackled by restrictions—picture it as having the fanciest car but being told you can’t drive on certain roads.
Key Restrictions
- Investments in Land: While you can invest, there are roadblocks and specific rules to follow, clearly trustees aren’t real estate tycoons just yet.
- Duty of Care: Trustees must prudently manage investments, balancing risk like a skilled tightrope walker.
- Consultation and Delegation: They must consult experts when needed (because sometimes even heroes need a little help) and can delegate certain investment decisions—think of it as having a financial sidekick.
Fictitious vs. Prudent Investor Standard
Trustees wielding this power must straddle the line between the adventurous ‘fictitious investor’—who dives into investments headfirst—and the cautious ‘prudent investor’, who would rather double-check the water depth.
Related Terms
- Trustee Act 2000: The superhero origin story of general power, giving trustees their financial capes.
- Trust Fund: The treasure trove trustees are sworn to protect and grow.
- Prudent Investor Rule: The rulebook our trustee superheroes swear by, ensuring they don’t turn into financial villains.
Suggested Reading
For those eager to delve deeper into the thrilling world of trust management and trustee powers:
- “The Trustee’s Legal Companion” by Liza Hanks and Carol Elias Zolla - A straightforward guide to trustee duties, peppered with real-world examples.
- “Trust Management and Trustee Powers” by James Kessler QC - A scholarly dive into the legal framework governing trustee powers, with a focus on the General Power of Investment.
Combining sharp wit with financial wisdom, understanding the General Power of Investment helps trustees navigate the choppy waters of investment opportunities with both the grace of a swan and the precision of a hawk. Whether you’re a trustee or just curious about the intricate dance of trust fund management, remember: with great investing power comes great fiscal responsibility!
