POLICING INVESTMENT DECISIONS OF TRUSTEES IN TRUSTS FOR SUCCESSIVE BENEFICIARIES
AbstractThe wide range of investment vehicles open to trustees under modern trusts, either under broad investment clauses or the emerging statutory "prudent man" rule, coupled with the wide discretionary powers over investments so often granted to trustees, gives to trustees an apparently great de facto power to affect the distribution ofthe economic benefits of the trust between successive beneficiaries. The same factors greatly inhibit any judicial attempt to control this de facto power through the traditional mode of application of equitable techniques for ensuring "even-handedness", which centre around Howe v. Lord Dartmouth and the corollary rules associated with that case. This article argues that there is a legitimate path which courts may take, not only to re-invigorate the Howe v. Lord Dartmouth group of rules as an effective means of affording a remedy for lack of even-handedness in the economic results of the exercise of the trustees' powers over investment, but also to break out beyond the traditional limits of operation of those rules for that purpose.
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