Spec Pro Class 2020

SECTION 1. Where trustee appointed.

 

          1. A trustee necessary to carry into effect the provisions of a

                    a. Will

                    b. Written instrument

          2. shall be appointed by the CFI/RTC in which the will is allowed, or

          3. CFI/RTC of the province in which the property or some portion     

                thereof affected by the trust is situated

 

Who May File Petition for Appointment of Trustee

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      The executor or administrator or the person appointed as trustee under the will or written instrument shall file the petition for the appointment of a trustee in compliance with the wishes of the testator.

 

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SECTION 2. Appointment and powers of trustee under will, Executor of former trustee need not administer trust.

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      Although the will does not name a trustee, the probate court exercises sound judgment in appointing a trustee to carry into effect the provisions of the will where a trust is actually created by the will by the provision that certain of the property shall be kept together undisposed during a fixed period and for a stated purpose.

 

 

SECTION 3. Appointment and powers of new trustee under written instrument.

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       The new trustee shall have and exercise the same powers, rights and duties as if he had been originally appointed, and the trust estate shall vest in him in like manner as it had vested or would have vested, in the trustee in whose place he is substituted.

 

        The courts will consider all the circumstances bearing on the matter, including the wishes of the beneficiaries, of the acting trustees, and the intention of the creator of the trust as revealed in the trust instrument in order to select a proper person for the position.

 

 

SECTION 4. Proceedings where trustee appointed abroad.

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      The powers of a trustee appointed by a Philippine court cannot extend beyond the confines of the territory of the Republic of the Philippines.

 

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SECTIONS 5-6

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SECTION 5.  Trustee must file bond

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General Rule:

     A trustee shall file with the Clerk of Court having jurisdiction of the trust a bond in the amount fixed by the judge of the said court.

 

Exception:

   The trustee may be exempted by the court from giving a bond when requested by:

                 a.  Testator; or

                 b.  All persons beneficially interested in the trust.

 

Note:

Such exemption may be cancelled by the court at any time and the trustee required to forthwith file a bond.

 

Neglect of the trustees to file a bond will be interpreted by the court as resignation or a decline to accept the trust.

 

SECTION 6. Conditions included in bond

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1.Account- That he will render upon oath at least once (1) a year until his trust is fulfilled a true account of the property in his hands and of the management and disposition thereof and such other accounts as the court may order.

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Note:

Accounts of trustees must be under oath and shall be filed annually. Accounts of EXECAD are not required to be under oath and except for the initial and final submission of their accounts, they shall be filed only on such times as may be required by the court (2 RIGUERA, supra at 129).

 

2. Settlement of Accounts- That at the expiration of his trust he will settle his accounts in court and pay over and deliver all the estate remaining in his hands, or due from him on such settlement to the person or persons entitled there to;

 

3. Inventory- That the trustee will make and return to the court, at such time as it may order, a true inventory of all the estate belonging to him as trustee, which at the time of the making of such inventory shall have come to his possession or knowledge; and

 

4. Management and Disposition- That he will manage and dispose of all such estate, and faithfully discharge his trust in relation there to, according to law and the will of the testator 0r provisions of the instrument or order under which he is appointed.

 

• When the trustee is appointed as a successor to a prior trustee, the court may dispense with the making and return of an inventory if one has already been filed.

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SECTIONS 7-9

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SECTION 7: APPRAISAL. COMPENSATION OF TRUSTEE.

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      When an inventory is required to be returned by a trustee, the estate and effects belonging to the trust shall be appraised and the court may order one or more inheritance tax appraisers to assist in the appraisement. The compensation of the trustee shall be fixed by the court, if it be not determined in the instrument creating the trust.

 

NOTE:

The compensation of the trustee is that which is provided by the instrument creating the trust. Otherwise, it shall be fixed by the court.

 

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SECTION 8: REMOVAL OR RESIGNATION OF TRUSTEE.

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    The proper Court of First Instance may, upon petition of the parties, beneficially interested and after due notice to the trustee and hearing, remove a trustee if such removal appears essential in the interests of the petitioners.

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     The Court may also, after due notice to all persons interested, remove a trustee who is insane or otherwise incapable of discharging his trust or evidently unsuitable therefor.

 

     A trustee, whether appointed by the court or under a written instrument, may resign his trust if it appears to the court proper to allow such resignation.

 

NOTE:

 

REQUISITES FOR REMOVAL OR RESIGNATION   OF TRUSTEE:

 

          1. Petition filed by parties beneficially interested;

          2. Notice to trustee; and

          3. Hearing.

 

Who may petition: Parties beneficially interested.

 

Grounds:

          1. Removal appears essential in the interest of petitioners;

          2. Insanity;

          3. Incapability of discharging trust;

          4. Unsuitability

 

 

NOTE:

A trustee is at liberty to tender his resignation and apply for his release on the sole ground of unwillingness to act further in the trust. But the acceptance of the resignation of a trustee is not a matter of course; due regard must be had for the interest of the parties to be affected and there must ordinarily be some ground for discharge other than the mere wish of the trustee to be relieved.

 

The TRUSTEE is prohibited from acquiring the property whether by purchase, even in a public or judicial action, either in person or through the mediation of another. (Art. 1491, NCC)

 

 

SECTION 9: PROCEEDINGS FOR SALE OR ENCUMBRANCE OF TRUST ESTATE.

 

     When the sale or encumbrance of any rel or personal  estate held in trust is necessary or expedient, the court having jurisdiction of the trust may, on petition and after due notice and hearing, order such sale or encumbrance to be made, and the reinvestment and application of the proceeds thereof in such manner as will best effect the objects of the trust.

 

     The petition, notice, hearing, order of sale or encumbrance, and record or proceedings, shall conform as nearly as may be to the provisions concerning the sale or encumbrance by guardians of of the property of minors or other wards.

 

Note:

The Rules on Sale and Encumbrance of Trust Estate shall conform as nearly as may be to the provisions on Sale and Encumbrance by Guardians.

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