What is the role of a Trustee?
You may have been appointed as a Trustee in someone’s Will or thinking about appointing someone you trust as a Trustee within your own Will, BUT what does it actually mean and what does the Trustee do?
Let’s take a look…
A Trustee is someone appointed to look after and manage the assets within a Trust and administer/distribute the Trust in accordance with the instructions set out.
A Trustee must always act in the best interests of the beneficiary, act honestly and fairly towards the beneficiaries of the Trust, whilst ensuring that they follow the terms of the Trust.
When appointing Trustees within your Will (perhaps for a Trust where your children, grandchildren or great-grandchildren, will be the beneficiaries, whilst under the age of 18), you can appoint a maximum of four Trustees, although you can appoint reserve Trustees if you wish. In the majority of cases people will choose the same executors and Trustees however, this is not always the case and you can appoint different Trustees and Executors.
Who to choose as a Trustee…
If you are placing property or land into a Trust, then you will need a minimum of two Trustees.
After knowing how many Trustees you need, you need to have a think about WHO would be the best Trustees.
Trustees must be at least 18 years of age and able to take on the role. Now, this may sound obvious but taking on the role and responsibility as a Trustee can be more suited to some than others and just because someone has reached the age of 18 does not necessarily mean they are able to take on such a responsibility.
Another consideration to think about is; your Trustees MUST be able to work together. Where you have more than one Trustee they must be able to make a UNANIMOUS decision before an action is taken and thus being able to work together is imperative.
It may go without saying, BUT your Trustees must have capacity, be of sound mind and be trustworthy.
Trustees can be your family or close friends, whilst others opt for appointing professionals (especially where the Estate may be quite complex). However, even if a professional is not appointed, a family or friend that is appointed as a Trustee can always seek professional help as and when required if they think it is necessary.
So, what is the role of the Trustee?
As we have said, the Trustee must act in accordance with the terms of the trust and always act in the beneficiaries best interests, but additional responsibilities include:
- Act fairly (this is important where there is more than one beneficiary);
- Protect the assets that are within the Trust;
- Insure the assets of the Trust if necessary;
- Distribute the income of the Trust to the beneficiaries;
- Distribute the capital to the beneficiaries;
- Keep accounts and an accounting history of all transactions;
- Complete Tax Returns and pay any tax that may be due to HMRC;
- Declare all income and Capital Gains Tax that is payable;
- If Inheritance Tax become payable, notify HMRC;
- Keep a record of any income and expenses from the Trust;
- Take reasonable care when making any investments;
- Register the Trust;
- Act in accordance with the Trustee Act 2000.
Remember, ALL Trustees must act UNANIMOUSLY.
Trustees must not personally benefit from the Trust.
All this may seem a large burden to place on your Trustees but professional help is always available to Trustees to support with managing trusts if required.
or 01727 865 121
Leah Waller
Have a Question or
want to book a
FREE Consultation?