(March 2003) by Lianne Macdonald An amendment to the British Columbia Trustee Act has changed the rules about investments made by trustees. Trustees include people or trust companies appointed to administer certain assets for the benefit of other individuals. The most common example of a trustee is the executor of your will, who is legally appointed to collect in and administer your assets for the benefit of your beneficiaries. The legal rights and responsibilities of trustees are governed partly by the Trustee Act and partly by Canadian and English court decisions. Traditionally, the Trustee Act restricted a trustee's ability to invest trust funds. Only low-risk investments (such as Canadian government securities or bonds, bank or trust company guaranteed investment certificates, and Canadian first mortgages for less than 75% of the value of the property) were permitted. The conservative, government-prescribed list of authorized investments was intended to prevent the mismanagement of trust funds by trustees, and minimize potential losses of trust moneys. But over time, the decline of sound returns on these prescribed investments resulted in pressure to relax the rules. The amendment to the Trustee Act, which came into force on February 28, provides that:
On the positive side, investment powers included in trusts and wills drafted prior to the new laws are likely still effective. If you have questions or concerns, please do not hesitate to contact us.
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