Two Funds Sued by Madoff Trustee Picard File Claims Against Custodian HSBC
Alpha Prime Fund Ltd. and Senator Fund SPC, two funds sued along with HSBC Holdings Plc (HSBA) by the trustee liquidating Bernard Madoff ’s firm, filed so-called cross claims against HSBC.

Published May 28, 2011.
Read more: Bloomberg

Trustees are the people that are named and appointed either in a trust document or will to legally own and administer property for the benefit of others that are either named in the trust document or in the will as beneficiaries. Trustees are not allowed to benefit from the property themselves whilst acting as a trustee, but it is possible for them to be both a trustee and a beneficiary within the same trust all the same. The trustee’s role is to manage and maintain the property for the beneficiaries under the terms of the trust and in accordance with the law. The trustees of a will or deed will hold the property for the benefit of, for example, any children under the age of 18 years, and they will continue to hold that property until they reach the 18 years of age. The terms and wishes of the testator on how that property should be held is set out in the trust document, which can be a will as well or by various acts of parliament.

The law gives automatic powers to trustees to allow them then to carry out their duties under the trust documents. The main duties are as follows: the power of advancement; the powers of appropriation; the power of trustees to charge; the power to delegate; the power to run the testator’s business; power to insure; and the power to invest.

Power of advancement allows trustees to pay capital to an infant beneficiary who to spend it on that child who has not reached the 18 years of age or the age when that child becomes absolutely entitled. This advancement is only to be one-half of the beneficiary’s share that they are absolutely entitled too. The powers of appropriation authorises the trustees to pass over shares or property in order to carry out a legacy or bequest without having to sell them and handing over the proceeds in cash. The power to run the testator’s business will allow not just trustees and executors to continue to run the testators business whilst trying to sell it. A trustee or an executor can legally run a business for up to one year.

The of trustees to charge enables appointed trustees who are professional trustees or trust corporations to charge for work done, with the consent of the other executors. This can even take place where there is no charging clause in the will. However, a trustee cannot charge for work done as a trustee but can recover any reasonable expenses incurred as a result of carrying out the trust.

 

Originally published here.

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