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Once a trust has been validly formed, its operation will primarily be guided by the terms of the trust document. While professionally drafted trust instruments will usually contain a full description of how trustees are appointed, how they should manage the property, and their rights and obligations, the law in any case will supply an ever fuller, comprehensive set of rules that apply by default, some codified in the Trustee Act 2000. In most instances, English law follows a laissez-faire philosophy of "freedom of trust". In general, it will be left to the choice of the settlor to follow the law or to draft alternative rules. Where a trust instrument runs out or is silent, the law will fill the gaps. In specific trusts, particularly pensions within the Pensions Act 1995 and investment trusts regulated by the Financial Services and Markets Act 2000, many rules regarding trusts' administration, and the duties of trustees are made mandatory by statute. This usually reflects the view of Parliament that beneficiaries in those cases lack bargaining power and need protection, especially through enhanced disclosure rights. For family trusts, or private unmarketed trusts, the law can usually be contracted around, subject to an irreducible core of trust obligations. The scope of compulsory terms may be subject of debate, but Millett LJ in Armitage v Nurse viewed that every trustee must always act "honestly and in good faith for the benefit of the beneficiaries". Additionally trustees must convey the trust property to beneficiaries if all are of full age and request it, can be required by court to disclose information about the trust, must follow the trust terms and use their discretion only for consistent purposes. They must avoid any transactions with any possibility of a conflict of interest, unless authorised by the trust instrument or the beneficiaries, and they must exercise a minimum level of care, which becomes higher for trustees with professional skills.
Read more about this topic: English Trusts Law
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