Tracing trust property-breach of law-trusts laws , Financial Accounting

Tracing trust property
 
Apart from suing the trustee, in the event of a breach of trust, the beneficiary may follow the trust property and recover it from third parties, or the proceeds thereof from the trustee. But he cannot follow property which has ceased to be identifiable, or which has passed into the hands of a person taking for value without notice of his interest. Some rules of tracing:
 
1) Where the trustee mixes the funds of two separate trusts in one bank account, the presumption is that the first trust money paid into the account is the first drawn out, the Rule in Clayton's Case;

2) Where a trustee mixes trust funds with his own in a single bank account and draws upon that account for his own purpose, the presumption is that he has drawn on his own money first even if it was paid in more recently than the trust money - (re Hallett's Estate);

3) Where a trustee mixes trust funds with his own, the beneficiaries will have a first charge on the mixed fund for the trust money;

4) Where a trustee purchases property with his own money and with trust money, the beneficiaries will have a first charge on the property purchased.

Posted Date: 12/15/2012 12:25:07 AM | Location : United States







Related Discussions:- Tracing trust property-breach of law-trusts laws , Assignment Help, Ask Question on Tracing trust property-breach of law-trusts laws , Get Answer, Expert's Help, Tracing trust property-breach of law-trusts laws Discussions

Write discussion on Tracing trust property-breach of law-trusts laws
Your posts are moderated
Related Questions
You are the Genesis accountant and have taken a class recently in financing. You agree to prepare a PowerPoint presentation of approximately 6-8 minutes using the examples and info

Tracing trust property   Apart from suing the trustee, in the event of a breach of trust, the beneficiary may follow the trust property and recover it from third parties, or the p

Q. Evaluate Price Earnings Ratio? The P/E ratio is in general regarded as an important ratio for equity investors. The P/E for a company may be utilizing as a basis for compari

Distribution to a beneficiary Before distribution to a beneficiary, the investments will be re-valued and the profits or losses divided between the beneficiaries as follows:-

Illustration of maximum possible loss method A, B and C have been partners for several years, sharing profits and losses in the ratio 2:2:1. They decided to dissolve the firm o

You have just started work for Warren Co. as part of the controller's group involved in current financial reporting problems. Jane Henshaw, controller for Warren, is interested in

Americans With Disabilities Act - ADA  legislation passed in 1990 that bans discrimination against people who are having disabilities. According to this Act, discrimination against

define law including contract and bankruptcy

Admission of a new partner When a new partner joins the firm/partnership, the new partner will enjoy the benefits arising as a result of goodwill created by the old existing pa

Q. What is Materiality? Materiality - Magnitude of an omission or misstatements of ACCOUNTING information that, in the light of surrounding circumstances, makes it probable tha