| Summary: | 碩士 === 國立臺灣大學 === 法律學研究所 === 105 === Taiwan has introduced Trust Law for more than two decades during which political and economic changes make the existing Trust Law no longer a fit and proper legislation, and as Taiwan becomes an aged society, the use of trust would certainly increase. Also, the trends in drafting practices are to leave the protection of settlor objectives and beneficiary interests primarily to the fiduciary duties imposed upon trustees. To ensure that the purpose of trust could be accomplished, the legislation concerning the duties of trustees shall be carefully reviewed. In response to the newest Trust Law amendment proposal, this thesis bases on lessons learned from Restatement (Third) of Trust, compares different regulations, makes references to the cases and academic views of the U.S., and then attempts to provide suggestions for the amendment.
The first chapter of this thesis is the preface. The second chapter first introduces the term “fiduciary duty” and analyzes the merits of including this general concept. Considering the concept of fiduciary duty has already been embodied in different specific duties, this thesis suggests that we need not codify the concept. The third chapter discusses whether there is sufficient justification for introducing the duty to administer. In terms of legislation, codifying the duty to administer could avoid debate over the administration of trustees and provide a clear guidance for trustees. Therefore, this article recommends codifying the duty to administer (including ascertaining the duties and powers of the trusteeship, the beneficiaries and purposes of the trust; collecting and protecting trust property; managing the trust estate to provide returns or other benefits from trust property; and applying or distribviiiuting trust income and principal). The fourth chapter probes whether the existing regulation fits the current circumstances, and then suggests that duty to earmark trust property is needed to eliminate all of the potentially conflicting interests occasions.
The fifth chapter concerning the duty of prudence first analyzes if the test of prudence should vary depending on whether the trustee receives compensation. By comparing trust with the contract of mandate in Taiwan’s Civil Code and the idea of Company, this thesis suggests that, to reconcile Trust Law with Civil Code and Company Act, the duty of prudence should not depend on being compensated or not. As to the question of whether the settlor could modify the standard of care and whether there is a limit, to maintain the flexibility of trust and consider the need of settlor to draft around fiduciary rules in order to effectuate his or her purpose, the settlor who wishes to modify the standard of care shall be free to do so, but with a limit not to absolve the liability for gross negligence. This thesis further suggests that the standard of care shall include the subjective test that takes the trustee’s special skills into account and makes the trust administration more efficient in turn.
The sixth chapter studies the duty of loyalty. The chapter starts with the issue of whether the duty of loyalty shall require a trustee to administer the trust “solely in the interest of the beneficiary” or “in the best interest of the beneficiary”. In light of the monitoring problem, the important protection provided by the sole interest rule, and the comparison between the trust law and the law of corporations, this thesis takes the view that the legislation of Taiwan shall adopt the sole interest rule. This chapter then reviews the duty of loyalty articles of the Trust Law amendment proposal, on the basis that the trust law policy is to prefer to remove altogether the occasions of temptation rather than to monitor fiduciary behavior, this thesis recommends the Trust Law amendment proposal shall prohibit conflicted transactions in which the risk outweigh the gain, such as employing trustee’s family members and taking advantage of a trust opportunity for personal gain, and allow the conflicted but benign transactions, such as loans by trustees personally with reasonable interest and trustees dealings with beneficiaries. In addition, this chapter analyzes the queries advanced by scholars with respect to article 34 of Taiwan’s Trust Law and agrees with the view that the article shall be abolished.
The seventh chapter affirms the regulation of duty of impartiality in the Trust Law amendment proposal. The eighth chapter discusses the duty to diversify, considering that a diversified portfolio can eliminate a significant amount of risk and stabilize the return, this thesis is deeply convinced that the amendment proposal shall include the duty to diversify. The ninth chapter recommends that the amendment proposal sets the duration for records and accounts keeping to 15 years. The tenth chapter argues that the rationale of the duty to furnish information and the asymmetrical information problem justify requiring the trustee to proactively furnish information to fairly representative beneficiaries. The eleventh chapter introduces the duty with respect to co-trustees in the U.S. and endorses Taiwan’s regulation that trust shall be jointly administered by all the trustees.
The twelfth chapter regarding the duty with respect to delegation first points out that excusing the trustee who made improper delegation merely because the delegate did not act unreasonably would encourage trustees to betray the confidences reposed in them, and considers the interrelationship between Taiwan’s Civil Code and Trust Law, this thesis argues that the liability for improper delegations shall be absolute. Next, the chapter makes the point that article 25 of the amendment proposal might hinder trust from getting astute investment advice, and the law shall allow the cost of delegation be paid from trust property when both the delegation and the cost are proper. The end of this chapter proposes that, in view of the monitoring problem and risk allocation, Taiwan’s Trust Enterprise Act shall include the liability rule with respect to the improper delegation.
The above analysis shows that the existing Trust Law and the amendment proposal could be further improved. This thesis intends to provide guidance to the amendment of Trust Law and attempts to suggest an enforceable trust law amendment proposal on the theory level. It is expected that through taking advantage of the experience from the Restatement (Third) of Trust, the trust scheme in Taiwan could be both theoretically and practically justified, thereby illuminates deeper debates about trust issues.
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