What is a Trustee?

A Trustee is someone formally appointed to manage assets of a Trust for the benefit of others (usually Beneficiaries), and to administer the Trust in accordance with its terms.

There is an ongoing obligation for Trustees to act in accordance with the terms of the trust and in the best interests of its Beneficiaries. Trustees also have a duty to act honestly and transparently and are also required to act fairly towards the Beneficiaries.

No more than 4 Trustees can be appointed to act, although reserve Trustees can be appointed in a Will. Also, a minimum of two Trustees are required to be appointed with Trusts which contain land or property. The reason for this is because no conveyance of land and/or property can be affected without the signatures of fewer than two Trustees.

For Trusts that do not contain land or property, then there is no limit on the number of Trustees, although it is still recommended to appoint between two and four in case the Trust deals in land and/or property later.

It is common for Executors of a Will to also be appointed as the Trustees, although separate Trustees can also be appointed.

Age Restrictions for Trustees

Under Trust law, a Trustee must be at least 18 years old to be appointed.

Choosing Trustees

It is important to take care when choosing your Trustees. You should consider whether they are capable to take on the role. For example, although legally old enough, would an 18-year-old be the most suitable choice of Trustee?

When multiple Trustees are appointed, due to the requirement to make unanimous decisions unless the trust otherwise directs, your Trustees must be able to work well together. If you knowingly appoint Trustees who do not see eye to eye. then the reality is that managing the Trust and making any decisions in relation to it could become very difficult.

Your Trustees must be of Sound Mind and be Trustworthy.

Many people choose to appoint family members or trusted friends.  Others may prefer to appoint a professional Trustee such as a solicitor or accountant if the estate is particularly complex. Alternatively, a Trustee can seek advice from a professional adviser as and when required. However, professional Trustees and/or advisers shall will usually charge fees for their services.

What are the Duties of a Trustee?

The duties and responsibilities of a Trustee include, but are not limited to:

• To act in accordance with the terms of the trust; and

• Protect the assets of the trust; and

• Act with a duty of care in accordance with the Trustee Act 2000; and

• Keep accounts; and

• Act fairly between the Beneficiaries; and

• Take reasonable care in making investments; and

• Act unanimously (usually); and

• Insure Trust assets where necessary; and

• Keep records of the Trust’s income and expenses; and

• Complete tax returns and pay any tax due to HMRC; and

• Register a Trust with HMRC upon its creation; and

• Distribute income and capital to Beneficiaries as appropriate; and

• Notify HMRC if Inheritance Tax (IHT) becomes payable; and

• Declare all Income and Capital Gains Tax (CGT) for payment.

Where Trustees are not complying with their duties or responsibilities, the Beneficiaries can apply to the Court to have them removed.

For further details WITHOUT fear of consultation fees of obligation, please visit our Trusts page.