I’m a Trustee – Help!
Being a Trustee can be a daunting prospect but don’t panic help is at hand. We offer specialist advice, guidance and support for Trustees – helping you navigate the rules, regulations and duties imposed on you.
To help get you started here’s some basic pointers:
On being appointed
Ok being asked to act as a Trustee by friends or family members is a big deal. It shows that they really value your friendship and trust you to look after things. But because it is such a big deal you should take a moment to reflect and carefully consider whether you should accept.
- Why have you been chosen?
- What is expected of you?
- Do you feel you can carry out your duties and responsibilities?
- Do you have any concerns?
Ask us or the legal advisers concerned for more information. Trusts are often included in Wills which don’t come into effect until much later. Make sure you speak to those asking you to act so you can be clear as to their objectives and wishes.
When the Trust starts
The trust document is key so make sure you get a copy (if the trust is included in a Will the Will is the trust document).
The trust document sets out the terms of the trust. It will also detail any express powers or restrictions. These are in addition to (or may alter) powers and restrictions contained in legislation.
Familiarise yourself with the trust document and make a note of any queries. Raise your queries with the legal advisers involved and seek confirmation of your understanding of the key terms. For more help give us a call.
Powers & Duties
Your duties and responsibilities are primarily contained in The Trustee Act 2000. This is the main piece of legislation for trustees.
For an easier read have a look at our summary. As with the trust document read through this and make notes of any queries. Raise your queries with those involved or call us for help.
Letter of Wishes
Often when preparing the trust those appointing you will have written a Letter or Memorandum of Wishes to provide you with guidance. This is not binding on you but is there as a guide for you when carrying out your role.
Letters of Wishes are not public documents. They give trustees an insight into the thoughts and objectives at hand when the trust was created.
One of your main duties is to secure the trust assets.
Ensure you have a breakdown and value of the assets involved. Make sure the assets are now held in the names of the trustees and that they are fully insured. Contact all asset holders to change the details of ownership: Land Registry, banks, building societies and share registrars etc.
A simple list of the beneficiaries involved is not enough. You must be fully aware of their circumstances (both personal and financial) as you need to bear these in mind when making decisions.
- Will a distribution from the trust adversely affect them?
- Do they receive any benefits which could be affected?
- Are they a declared bankrupt? Is there a trustee in bankruptcy?
- Are there other sources of funds before using the trust to benefit them?
Review & Record
It is essential that regular trustee meeting are held to:
• Review the trust assets;
• Review investments; and
• Conduct general administration
Seek input from professional advisers involved in the trust administration. Record what is discussed and any decisions made – why they were taken and why taken in that way. This is vital to protect your position should challenges be made in the future.
Maintain a diary for important dates. Ten year anniversaries are key and you should take advice in advance. Keep a note of each beneficiaries’ birthdays to ensure you do not miss dates when their entitlements are due.
Accounts should be maintained to record transactions, profits and loss, income receipts and distributions made. Ensure that tax returns and tax certificates are completed, submitted and distributed.
Keep people informed regularly. There is nothing worse than keeping beneficiaries in the dark. You have a duty to consult with the beneficiaries but this does not mean you have to follow their wishes.
Consider the interests of the beneficiaries – the trust has been established for them. Failing to use the trust funds to help the beneficiaries is unlikely to meet the objectives of the trust.
Ensure that accounts and explanations are available should beneficiaries ask for information. If you are unsure whether you should release information seek professional support. Even if you do not have to release information providing it may be beneficial.
You are joint and severally liable with your co-trustees for the running of the trust.
Make sure your co-trustees are exercising their roles too. Decisions should be made promptly and documents signed in good order. If a co-trustee is struggling to fulfil their role they should consider retiring and you should discuss this with them sooner rather than later.
Getting help is to be expected. You need to be sure you are able to make informed decisions and for that you will sometimes need professional help.
Some functions can be delegated to professional advisers and organisations but you remain responsible. You should ensure you are kept informed and have oversight.
When delegating investment management functions prepare a policy statement. This ensures investment managers are aware of the investment requirements of the trust and you can hold them to it.
Review advice given and service provided regularly. If you fail to take advice, where appropriate, or dis-instruct agents acting unsatisfactorily you could be held accountable.
For your peace of mind individual advice is essential. If you have queries on your position as a trustee or on any existing trusts call us for further information and support.
The information contained in this document provides background information only and should not be relied upon as an exhaustive list of the legal issues involved.
Contact us for advice, support and guidance – it’s what we do:
T: 01227 700 702
Published by Simon Crooks 25 June 2015