WHAT IS A TRUSTEE?

Trustees – Roles and Duties

The role and responsibilities of a trustee should not be undertaken lightly. If you have been chosen as a trustee, the settlor feels that you can be trusted to act in the best interests of the beneficiaries, and can manage this important role if or when you may be required to act.

Trustees are under a statutory duty of care (Section 1 Trustee Act 2000). This means that they must take reasonable skill and care when dealing with trust assets, and if there is ever any question as to whether they have exercised reasonable skill and care, the law will take into account any special knowledge that they may have.

Trustees must understand the terms of the trust so that they can follow the trust rules.

Decisions between all trustees must be unanimous and where a trust is established to benefit a number of beneficiaries equally, the trustees must not favour one beneficiary or type of beneficiary over another.

In this case, often a letter of wishes is provided by the settler to help the appointed Trustees. It is advisable to check if this is available and accessible.

Trustees are advised to seek professional advice when making investments. Trustees should not be put in a position of conflict between their own personal interests and the interests of the trust and its beneficiaries.

Trustees are advised to seek professional advice when making investments. Trustees should not be put in a position of conflict between their own personal interests and the interests of the trust and its beneficiaries.

Trustees may delegate their duties of administration and investment to professionals if permitted by the trust deed, however, the overall responsibility will remain with the trustees.

The trustees’ duties include:

  • Registering the trust assets in the trustees’ names;
  • Liaising with other trustees to act in the best interest of the beneficiaries;
  • Investing the trust funds without making personal profit or causing loss to the trust;
  • Acting impartially and treating all classes of beneficiaries fairly in accordance with the terms of the trust and any letter of wishes that comes to their attention;
  • Holding annual trustees meetings and maintaining accurate accounts/records; and
  • Completing annual tax returns to HMRC on any income tax, capital gains tax and entry, exit and 10-yearly inheritance tax charges on the trust assets.

 

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