What is a trustee?
A Trustee can be referred to as a person or organisation who is responsible for managing or holding property or money for someone else through a trust. In simple terms a Trustee is the holder of property on behalf of a beneficiary.
What duties and responsibilities do trustees have in relation to the management of the Trust’s assets?
A Trustee has a variety of legal responsibilities and a ‘fiduciary duty’ to act in the best interest of the person(s) to whom the trust relates too. Trustees should ensure that everything is done properly and that their duties are carried out in a timely manner.
The main duties of a Trustee are:
- To act in accordance with the Trust document by complying with the terms of the trust and provide general advice when requested;
- To provide a duty of care to the beneficiaries, consider the beneficiaries bests interest and needs and provide, upon request, information and copies of accounts;
- To act in a fair and respectful manner to all the beneficiaries and act in a unanimous capacity (unless otherwise stipulated by the trust);
- When investing on behalf of the beneficiaries to take care and consider the suitability of any investment;
- A Trustee must never profit from a trust (this however does not mean that he cannot receive money for carrying out his duties whereby the trust makes provisions).
The main responsibilities of a Trustee are:
- To keep true records and accounts of the trust’s income and expenses;
- To declare all income and capital gains tax and its payment;
- Trustees are responsible for the payment of any tax due;
- Returning completed annual tax returns;
- Updating HMRC when any inheritance tax charge becomes payable;
- Updating HMRC when new trusts are established and provide details of the new trusts income and/or capital gains;
- Updating HMRC when a trust (which has not previously done so) starts to generate income and/or capital gains.
Trustee disputes can arise between Trustees themselves or between the Trustees and the beneficiaries. Those disputes can range from challenges to the Trustee’s management of the trust or estate to the manner in which the trust assets are distributed. A Trustee can be held personally liable for breaches of duty and can be required to reinstate all losses caused to the trust fund from his or her own resources. In some circumstances a Trustee may also be made subject to personal penalties, for example if he or she fails to provide information to HMRC where required.
Whether you are a Trustee seeking guidance on your responsibilities and duties or advice on how you can protect yourself from claims by beneficiaries or your co-Trustees, or a beneficairy seeking advice on your rights against Trutees, our Disputed Wills, Trusts and Estates Team, is able to assist you. In that case please contact our Disputed Wills and Trusts Team by telephone on +44 (0)1884 203 018 or FREEPHONE 0800 0931336, or by email at email@example.com.