Trustee's Indemnities On Distribution - More Than Reasonable Security

INTRODUCTION

When a trustee resigns, retires or is removed from office it is under a statutory obligation by Article 34 of the Trusts (Jersey) Law 1984 (as amended) (the Trusts Law) to surrender the trust property and upon doing so is released from liability to any beneficiary, trustee or person interested under the trust except for liability arising from any breach of trust to which it was a party or in respect of actions to recover trust property in its possession or its proceeds. But what is the position where a trustee parts with part of the trust fund but remains a trustee of the remainder?

PERSONAL LIABILITY OF TRUSTEES

Because trusts do not have separate legal personality a trustee remains personally liable for third party contractual, tortious or taxation liabilities incurred or arising from its office as trustee. Whilst in office a trustee has possession or control of the trust property and can therefore directly discharge properly incurred liabilities