Commentary on Clauses Part V: Remuneration
Sections 28 to 33 make up Part V of the Act, relating to payment of fees to professional trustees and reimbursement of expenses incurred by trustees. The general rule at present is that trustees should not be paid for carrying out their obligations under the trust, even when they are using their professional expertise. The principle behind this ban on payment of trustee fees is that trustees should not derive any benefit from the trust and any conflict of interest and duty should be avoided. In certain circumstances, however, even under the current law, payment to trustees is permitted, perhaps by a clause in the trust instrument, or by statute or by court order. In practice today most modern trust instruments contain professional charging clauses; without such express clauses allowing payment, many professional practitioners would not be willing to take on the burden of trusteeship. Of course, such clauses can give rise to problems in interpretation and application. For example, these clauses are strictly construed against the trustee, so, unless stated to the contrary, the charging clause only covers services which could not have been provided by a lay trustee. Another drawback is that remuneration under a professional charging clause can sometimes be regarded as a gift or legacy rather than simply an expense of the administration of the trust or estate. These issues are also addressed in this group of provisions.