Accounts under trustee-trusts laws and accounts, Financial Accounting

ACCOUNTS UNDER TRUSTEE

(a) Authorised investments

The investments which trustees are permitted to hold may be specifically stated in the will or deed constituting the settlement. Where the will or deed is silent on the matter, the authorised investments are as provided by statute. The Trustee lays down the scope for trustees' investments but has also introduced safeguards to prevent excessive losses to trust funds from unsuitable investments.

(b) Division of the trust:

The safeguards consist in the division of the trust funds into portions. Before this division takes place, the investments are revalued in order to determine the total value of the funds as at the date of division. Any investments which are acquired or retained under a specific power in the will or settlement are designated as special range property and are kept quite separate from the other investments. 

(c) Fixed Interest Securities: no advice in writing is required before an investment in fixed interest securities is made.
 
1.    Government Securities.
2.    Treasury Bills.
3.    Fixed interest securities guaranteed by the Government

(d) Wider-range Investments:
(requiring advice in writing from a properly qualified person)
 
Quoted shares of a Kenya company with a paid-up capital of not less than Shs10m and has paid dividends on all issued capital for the past five years.

(e) Dealing with changes in the trust:
 
Profits or losses on disposal of investments should be treated as belonging to that part of the fund out of which they accrued. If not applicable to either part, the accrual must be divided between each fund.

Posted Date: 12/15/2012 12:52:28 AM | Location : United States







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