Is a trustee liable for any loss to the trust estate if the trust funds were left uninvested for an unreasonable amount of time?
British Columbia, Canada
The following excerpt is from McQuarrie v. Jacobs, 1987 CanLII 2735 (BC SC):
Turning now to the merits, the law is clear that a trustee must duly and promptly invest all capital trust money coming to his hands and all income which cannot be immediately applied for the purposes of the trust, and he is liable for any loss which may result from its being improperly invested or being left uninvested for an unreasonable length of time, and for interest during the period of its being so left. 48 Hals. (4th) 454, para. 835; Cann v. Cann (1884), 51 L.T. 770, where the headnote reads: Held, that fourteen months was too long for the trustees to leave trust money on deposit at a bank; that if after six months they could not get a mortgage they ought to have invested the money in consols; that, from the moment they left it too long on deposit, they became responsible for the consequences of their default, and were therefore liable for the sum lost to the trust estate.
"The most advanced legal research software ever built."
The above passage should not be considered legal advice. Reliable answers to complex legal questions require comprehensive research memos. To learn more visit www.alexi.com.
Other Questions
Is there any case law that supports the proposition that a person who is not a trustee of a trust is entitled to the same amount of money as a fiduciary trust? (British Columbia, Canada)
Can a stranger to a trust be held liable as a constructive trustee for breach of trust? (British Columbia, Canada)
In what circumstances can a trustee seek direction from the court to proceed with an action in which the beneficiaries of the trust have been denied access to the trustee's funds? (British Columbia, Canada)
Can beneficiaries of a trust terminate the trust and have the trust property transferred to them? (British Columbia, Canada)
Is a shareholder of a Real Estate Investment Trust entitled to a claim of diminution in the value of the trust's assets? (British Columbia, Canada)
Is a beneficial interest held by shareholders in Del Cano Real Estate Trust a "beneficial interest" in the real estate REIT? (British Columbia, Canada)
What is the test for establishing that a transferor intended to transfer funds from a bank account to a personal trust account at the time of the transfer? (British Columbia, Canada)
What is the case law in favour of reducing the amount of time a minority-time parent has to spend with her child under s. 9 of the Child Support Guidelines? (British Columbia, Canada)
Can a stranger to a trust be found liable for knowingly participating in a fraudulent breach of trust? (British Columbia, Canada)
Does a client have to deduct legal expenses from the capital amount to be invested in a mutual fund before calculating the amount of management fees? (British Columbia, Canada)
