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Advice for Trustees

Who should not be a trustee?

  • Any person under 18. It may also be too much responsibility for younger people over 18
  • Undischarged bankrupts and those with voluntary arrangements with creditors
  • People with current money troubles or with a history of money troubles
  • People in prison or who have or may soon be convicted of offences involving dishonesty
  • People with a conflict of interest with the compensated person or others in the trust
  • People with serious health problems who may be unable to fulfil their duties at any time
  • People who live outside the UK or may do so
  • People who are in any way concerned they might be unable or unwilling to fulfil their duties as trustee
  • Ideally the compensated person and their partner should not be trustees

A Professional Trustee such as a solicitor can help by:

  • Handling difficult conversations for you and removing the personal element that may something make conversations awkward.
  • Managing the financial element of the trust using expert wealth managers with years of experience who can help to invest your compensation, making it last even longer.
  • Guiding you on how to handle requested from family for money.  You may come under pressure and we’re here to help you manage those situations. Your compensation is for your benefit only. 

What are the powers of the trustees?

The Trustees have certain powers over the handling of the Trust fund.  These are set out in the Trust deed.  Trustees do not have any power to go beyond the terms of the Trust deed unless they are included within the general law.

Most things a person would want to do with their own money can be done by the Trustees for the benefit of the beneficiaries.  For example they can, upon taking appropriate advice, open and operate a bank account, invest money, buy and insure property and purchase help and assistance for the beneficiaries.

Trustees may sometimes need to take legal advice.  That is funded by the Trust fund and not from their own pockets unless the Trustees do something wrong.  That is called committing a ‘breach of Trust’.  Trustees are liable for losses due to ‘breach of Trust’ out of their own pockets, so taking legal advice is important.  Trustees can also obtain help from accountants, for example in filling in tax returns, and from other professionals as required.  Again, that is at the expense of the Trust fund so far as it is necessary to the smooth running of the Trust.

What are the duties of the trustees?

A Trustee must:

  • Disclose any circumstances where they might have a conflict of interest with a beneficiary. For example if a beneficiary owes a trustee money this should be disclosed.
  • Not act in conflict with the interests of the beneficiaries or profit from their role as trustee.
  • Ensure they know what the terms of the trust are and that they are carried out.
  • Ensure that they do not act beyond the terms of the trust and its powers.
  • Ensure that good trust records and accounts are kept and pay tax due on time.
  • Take independent financial advice. This does not preclude the use of common sense.  The trustees must also ensure that the advice taken is in accordance with the Trustee Act 2000.  The ultimate decision over what to invest in is the trustees’ decision.  It cannot be delegated.
  • Act impartially and fairly between any multiple beneficiaries and those who are beneficiaries now and those who will be in the future. This is the general rule but in the case of a personal injury trust the compensated beneficiary will be expected to be the main beneficiary for life.  That is allowed for under the powers of the trustees.
  • Take reasonable care. Professional trustees must take more care than others.
  • Act jointly. Trustees should not normally delegate functions to each other.  Trustees are jointly liable for mistakes and should therefore act together.
  • Not charge. Professional Trustees can claim more than out of pocket expenses.   Where Professional Trustees are employees of Banner Jones Limited they will charge in accordance with their usual charging rates.
  • Ensure the beneficiaries are kept fully informed as this avoids disputes.

If you do not feel that this is something you can take on then let our experienced Trusts team help.  Banner Jones are experienced in managing all kinds of Trusts for our clients, allowing families to carry on without the burden of managing a Trust as well.    If you are a newly appointed trustee and just need guidance on some of the duties, we can also assist with as much or as little as you need.

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