Trustee Act

This Act may be cited as the Trustee Act.

This section defines key terms and lets the Minister responsible for Finance approve a company as a trust corporation, and require or increase security as a condition of approval.

This section says the Act applies to trusts, and—so far as it applies—it also covers executorships and administrations. Trustee powers under the Act are additional to any powers in the trust instrument, and the trust instrument controls where it shows a contrary intention. The Act also does not disturb the legality or validity of things done before commencement, unless another provision says otherwise.

A trustee may invest property in his hands in the ways listed in the Schedule and may vary those investments, subject to section 5(2).

A trustee who is not a trust corporation may not make a wider range investment under section 4 unless they first obtain and consider proper advice about whether it is satisfactory, having regard to section 8 matters.

A trustee may ask a trust corporation for proper advice about a wider-range investment, but the request must include full details of the trust and its current investments.

This section says section 4 powers add to, and do not replace, other trustee investment or postponement powers; older special powers are treated as having the same effect as powers under sections 4 and 5.

Trustees must consider diversification and suitability when investing, and must decide when to seek section 6 advice if they retain wider range investments.

A trustee may invest in certain securities even if they are redeemable and bought above redemption value, and may keep redeemable stock, fund, or security until redemption if it was purchased under the Act or replaced law.

A trustee must exercise the powers given by sections 4 and 9 at the trustee’s discretion, unless the trust instrument or law requires consent or directions. The trustee may also consider advice from sources other than a trust company.

A trustee is not liable for breach of trust just because they keep holding an investment after it stops being authorized.

Trustees with power to invest in freehold securities may make certain mortgage-style investments and accept registered charges, but must not use trust funds for improvements to land held on trust for sale unless proper advice has been obtained and considered.

A trustee may invest in bearer securities unless the trust instrument expressly forbids it, but non-trust-corporation trustees must deposit such securities with a bank until sold.

Trustees are protected from being charged with breach of trust in certain lending and investment situations if stated conditions are met.

If a trustee improperly advances trust money on a mortgage security, the trustee is liable only for the excess over the smaller amount that would have been proper, plus interest.

This section gives trustees and, for one sale power, a tenant for life extra powers to structure loans, land sales, and trust investments, subject to stated limits and conditions.

Trustees may temporarily deposit trust money in a bank and may use capital money to pay calls on shares held under the same trust.

Trust property can be treated as one trust fund in defined cases, and trustees must obtain proper advice when property is appropriated into a separate fund.

The Act does not reduce the Court’s power to give trustees wider investment powers, or limit how that power is exercised.

The Minister of Finance may, if he thinks it expedient, make an order in the Gazette to delete from, vary, or add to Part I or Part II of the Schedule.

A trustee with a power of sale may sell property by auction or private contract and may vary, rescind, or resell sales.

Trustee sales cannot be challenged by beneficiaries or purchasers on the ground that the sale conditions were unnecessarily depreciatory, except in limited cases.

A trustee may give a written receipt for trust money or property, and that receipt discharges the payer, with a narrow exception for certain land-sale proceeds received by a sole trustee unless the trustee is a trust corporation.

Certain estate and trust representatives may, if they think fit, deal with property, debts, claims, and settlements in specified ways.

Trustees who are authorized to deal with capital money may raise required funds by selling, converting, calling in, or mortgaging trust property in possession.

A purchaser or mortgagee paying money on a trust sale or mortgage does not have to check whether the money is needed, raised in the right amount, or applied properly.

If trustees are joint, the survivors may carry out the power or trust. Before new trustees are appointed, certain personal representatives may also exercise or perform the trust powers, subject to restrictions on receipts by a sole trustee who is not a trust corporation.

A trustee may insure a building or other insurable property against fire loss or damage, pay the premiums from trust income, and do so without consent in the stated circumstances.

Insurance money for trust property is treated as trust capital, and certain people must pass it on to the trustees or into court.

Trustees may deposit trust-related documents with a bank or other company that provides safe custody of documents, and any deposit fee must be paid from the trust property’s income.

Trustees may value trust-related property, accept investments, make deductions, release liabilities, and have trust accounts audited; they are generally not required to take certain protective proceedings unless requested in writing and costs are covered.

Trustees and personal representatives may hire agents to handle trust or estate business, and they may be protected from responsibility for an agent’s default or loss in specified cases.

Trustees or personal representatives may act together with the people entitled to other shares when dealing with a qualifying share.

A trustee who plans to be outside Malawi for more than a month may delegate trust powers by power of attorney, with limits and formal requirements.

Trust corporations may be appointed jointly as trustees and may hold property as joint tenants.

A personal representative or trustee can convey or distribute property after settling certain lease or grant liabilities, and is then not personally liable for later claims under that lease or grant.

Trustees or personal representatives may advertise notice of an intended conveyance or distribution, then distribute after the notice period if they have received claims.

A trustee or personal representative handling more than one trust or estate is protected from being treated as having notice for one trust or estate just because they learned it while acting for another, unless there is fraud.

A trustee who acts or pays money in good faith under a power of attorney is not liable just because the donor was disabled, bankrupt, dead, or had done something to avoid the power, if the trustee did not know that fact.

A trustee is liable only for money and securities actually received, is responsible only for their own acts and defaults, and may use trust assets to cover expenses incurred in carrying out the trusts or powers.

Trustees may use trust income for a minor’s maintenance, education, or benefit, and must accumulate the unused income under the section’s rules.

Trustees may use trust capital for a beneficiary's advancement or benefit, but only within stated limits and subject to protective exceptions.

This section says income held on protective trusts must be held for the principal beneficiary during the trust period, but the trust can end early if the beneficiary does certain acts or events happen.

This section limits land trustees to four, with specific exceptions.

When new trustees are appointed, the relevant trustees must endorse or attach a memorandum to the instrument, and the person holding the document must produce it when required.

This section lets certain people appoint new or additional trustees when a trustee dies, is absent, wants to step down, is unfit or incapable, or is a minor.

A trustee cannot be discharged from the trust unless there will be a trust corporation or at least two individuals acting as trustees, subject to a stated exception for some sole-trustee cases.

A statement in a new trustee appointment instrument can be conclusive evidence for a purchaser of a legal estate if it says the trustee has been away from Malawi for over 12 months, refuses or is unfit or incapable to act, or is not entitled to a beneficial interest.

A trustee may retire and be discharged without appointing a new trustee if the stated conditions are met and the required deeds are made.

This section says that when a deed appoints a new trustee or discharges a retiring trustee, the relevant trust property can vest in the new or continuing trustees without a separate conveyance or assignment if the required vesting declaration is made, and in some cases the deed is treated as if it contained that declaration.

The Court may appoint new trustees when it is practical to do so and not practical to do it without the Court’s help.

The Court may authorize a trustee it appoints to charge remuneration for trustee services.

A trustee appointed by the Court has the same powers and discretions as an originally appointed trustee, both before and after the trust property is vested in them.

The Court may make vesting orders for land or interests in land in listed trustee situations, and may also deal with contingent rights.

If land is subject to a contingent right of an unborn person, the Court may order that the land be released from that right or vest the relevant estate or interest in another person.

If a minor holds a land interest or contingent right as security for money, the Court may order that interest or right to be vested, released, or disposed of.

If a court orders the sale or mortgage of land, it may also vest the land or part of it in a purchaser, mortgagee, or another person, and affected persons are treated as trustees for this Act.

When certain land judgments are made, the Court may declare parties or unborn beneficiaries to be treated as trustees and may make a vesting order over their rights.

A vesting order has the same legal effect as if the relevant conveyances or release had been properly executed by the persons whose rights it replaces.

The Court may, where a vesting order could be made and it is more convenient, appoint someone to convey land or an interest in it, or to release a contingent right.

The Court may make vesting orders about stock or things in action in listed cases, and banks and similar bodies must follow those orders.

The Act’s vesting-order powers may be used to vest land, stock, or things in action in a trustee of a charity or society, if the Court would have jurisdiction on a properly instituted action.

If a minor owns property beneficially, the Court may make orders to have the property conveyed or to vest transfer and related rights in another person, for the minor’s maintenance, education, or benefit.

If a vesting order under this Act is based on certain stated allegations, the making of the order is conclusive evidence of that allegation in later court questions about the order’s validity.

The Court may authorize trustees to deal with trust property when the transaction is expedient and the trustees lack the needed power.

This section says certain people may apply for orders under the Act about trust or mortgage interests in land, stock, or things in action.

The Court may decide and give judgment in an action against a trustee defendant who cannot be found after diligent search, as if the trustee had been properly served or appeared.

The Court may decide how costs and expenses connected with certain trustee and vesting applications are paid from the trust property or income.

The Court may fully or partly relieve a trustee from personal liability for a breach of trust if the trustee acted honestly and reasonably and should fairly be excused.

If a trustee breaches trust at a beneficiary’s instigation, request, or written consent, the Court may order the beneficiary’s trust interest to be used to indemnify the trustee or others claiming through him.

The Court may approve changes to certain trusts, including revoking or varying them or enlarging trustees’ powers, for specified beneficiaries or future beneficiaries in defined cases.

Trustees, or a majority of them, may pay trust money or securities into court in specified cases; the court can also order payment or delivery to the majority.

This section applies the Act’s trustee-appointment, discharge, and retirement rules to certain Settled Land Acts trustees and lets specified persons appoint new or additional trustees.

Property held on trust or by mortgage is not to vest in the Registrar General if the person becomes subject to forfeiture.

Banks and other persons are indemnified for acts done under this Act or under orders made, or purportedly made, under it.

The Chief Justice may make court rules for practice and procedure in proceedings under this Act.

This Act binds the Government.

This section preserves earlier vesting orders, appointments, and other acts under the repealed enactments, and treats document references to those repealed laws as references to this Act or the matching provision in it.