7.16We include below an indicative draft of the duty to invest prudently and the standard of care for investment. It is important to note that these two provisions are closely related to the power to invest provision, which would be modelled on the current section 13A, and would give effect to R14(1). That provision would give trustees the power to invest the trust funds in any property. This has not yet been drafted.
Clause 12 of the Bill states that clause 23 is a default duty (see Appendix A). Clause 11 provides that a default duty is one that the trustee must perform unless it is modified or excluded by the terms of the trust. Clause 26 replaces sections 13B and 13C of the Trustee Act 1956. It provides for a situation where trustees may have held themselves out as having special skills or experience or belong to a profession or business that may mean that they could reasonably be expected to make special knowledge or skills above and beyond those of an ordinary but prudent person of business. These two provisions apply when a trustee is exercising a power of investment. The power of investment provision has not been drafted, but like section 13A of the Trustee Act 1956, which it replaces, it will give a trustee a default power to invest in any property. That power could be overridden or modified by the terms of the trust.