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Equity and trusts seen exam question

Hi guys

If anyone can help out as to what topics i should include in this question, as well as what advice i could give to the beneficiaries then that would be great...many thanks

Astrid and Nina are the trustees of the Bishop Family Trust. The trust property has been recently valued at £5 million. Nina used to be the head of a multi-national organisation. She is now retired but is generally considered to be a very experienced and competent business person. Astrid does not have any qualifications or work experience but she is very good at puzzles and considers herself to be very intelligent. The beneficiaries of the Bishop family trust are Walter, his son Peter, and Peter’s wife Olivia.

The trust assets are currently invested mainly in a company called Collateral Damage plc, whose main business is manufacturing and selling arms. This investment gives a good rate of return.

Walter has always had a strong interest in scientific research, and he is very keen that a large proportion of the trust assets should be invested in this area. Because he is so insistent about this issue, Astrid and Nina take a fifth of the fund and invest in a company called Fringe Research. The investment is not an immediate success, and it has not made any profit so far, but no money has yet been lost either.

Peter and Olivia are very uncomfortable with the investment in the arms company because their daughter was recently killed in a shooting incident. They would very much prefer that the money was invested to ‘make the world a better place’, and they put pressure on Astrid and Nina to invest at least some of the money in a more ethical fund. Astrid and Nina do so, even though the profits are less than from the arms company, as they do not want to upset Peter and Olivia.

Astrid has recently read an article in a magazine which promises a super-high rate of return on an investment into the development of personal jet-packs for commuters. Astrid is convinced this will be the new way for people to travel in the near future, and she is certain that an investment in this industry will be very beneficial for the trust. Nina is not so sure, but she is prepared to take a chance and she agrees to the investment. Nina and Astrid invest £1 million in the jet-pack scheme. The idea does not catch on, and the whole £1 million is lost.

Advise the beneficiaries.
(edited 5 years ago)
This looks like an attempt to cheat - have you been told that you are entitled to seek outside assistance? Usually exams have to be all your own work...
Original post by Forum User
This looks like an attempt to cheat - have you been told that you are entitled to seek outside assistance? Usually exams have to be all your own work...


its a seen question which means yes, we are allowed to seek outside assistance.
Original post by halimachughtai
its a seen question which means yes, we are allowed to seek outside assistance.


No, that doesn't follow at all.
We will likely clarify some areas of uncertainty, but that will probably be the extent of our involvement.

Tell us what your think the answer is, what bits you don't understand, and we might be able to help. Otherwise, you're going to be disappointed.

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