Trustees are appointed in Trusts created during lifetime or those created following a death.
The Trust and Trustees are the legal owners of the trust property but hold it for the beneficiaries of the Trust.
Trustees are needed if a beneficiary is under the age of 18. In these circumstances the Trustee will be responsible for taking care of the child’s funds until they reach 18 (or the age which the Trust document specifies).
Trustees may be appointed to manage a Trust that has been set up as part of a Will and holds some (or all) of the Estate. The Trust would need to be managed in line with the terms that have been set out in the Will.
If a Trust is established under the Will then the Trustees (who have been named in the Will) become responsible for receiving the inheritance on behalf of the Trust. The Executor will need to distribute this portion of the Estate to the named Trustees, who are then legally responsible for managing this cash or assets on behalf of the beneficiary or on behalf of the Trust. The Trustees will need to carry out their role in accordance with the terms set out in the Will.
Trustees have a duty to act in accordance with the terms of the Trusts and to act fairly towards the beneficiaries, balancing each of their interests. There is also a statutory duty of care under the Trustee Act 2000 to “exercise such care and skill as is reasonable in the circumstances”.
A Trustee is a person who takes responsibility for managing money or assets that have been set aside in a Trust for the benefit of someone else.
As a Trustee, you must use the money or assets in the Trust only for the beneficiary’s benefit.
Everything you do as a Trustee must be done in the beneficiary’s best interests. Exactly what you can and can’t do as a Trustee might be set out in detail in the Trust agreement.
For example, the Trust agreement might say the Trust is to pay for an older person’s care fees. If that’s the case, you can’t use the money for anything else.
You won’t be able to benefit from the Trust yourself (unless the Trust agreement says you can).
If the Trust is a ‘discretionary Trust’, the Trustees will have more freedom to make decisions.
For example, if the Trust is set up to benefit a number of young children, you and any other Trustees can use it for anything you agree is for the benefit of any one of the children, like paying for a school trip.
If you’re asked to be a Trustee, think carefully about whether it’s right for you. Here are some things to consider.
Being a Trustee can really help someone important to you. If someone asks you to be a Trustee, it usually means they trust you to do the right thing for them and the people who benefit from the Trust.
It’s a lot of work and responsibility, and you might end up being liable for losses made by the Trust if you don’t carry out your duties properly. Some Trusts can take a lot of your time to manage properly. As a Trustee you usually won’t be paid, or get any benefit yourself. You’ll be carrying out your duties as a Trustee for the benefit of others.
Being a Trustee is a long-term commitment. Some Trusts have a set end point – for example, when a child turns 18 – but others can go on for up to 125 years! You could be a Trustee for decades in some cases.
You must agree with all of the other Trustees when making Trust decisions. So it’s worth understanding who they are and deciding if you think the relationship will work.
If you are a Trustee or are involved in a Trust and know that one of the Trustees is becoming frail please contact Helena Grady at Fogwill & Jones (Legal Services) Limited for advice. Helena is a Solicitor and member of the Society of Trust and Estate Practitioners (STEP) with many years’ experience of advising on Trust matters.
Source: Helena Grady (Solicitor) Fogwill & Jones (Legal Services) Limited
