In this fast changing business climate, more and more companies are coming into contact with Trusts and Trustees than ever before.
This may be in the form of pensions and pension providers, investment companies or simply business models to enable assets to be managed more efficiently.
However, it is likely that as some point in our business lives we will need, or use, Trustees.
What is the role of a Trustee?
A Trustee’s responsibility is to act in the best interest of the Trust as a whole and to be as impartial as possible.
They are sometimes, unfortunately, placed in a position of making incredibly controversial decisions in an attempt to protect assets for long-term goals rather than short-term gain.
The Trustees’ powers are governed by the terms of the Trust and the terms of the Trustee Act, but in brief they must protect and handle trust assets for the benefit of the beneficiaries (this could be a single beneficiary, or a small or large group of individuals).
The aims of the Trust and any restrictions placed on the Trustees will be set out the terms of the trust agreement. This is where is it important to be aware that poorly drafted Trust documents which fail to supply sufficient leeway for the Trustees to carry out their duties as custodians of the Trust funds, simply hamper rather than assist the efficiency of the trust as a whole.
The Trustees do not own any of the Trust assets personally, but they are expected to invest Trust funds prudently and productively taking professional advice if required. They will also have, unless specifically prohibited, the ability to lease, mortgage, or sell any trust asset if deemed necessary in fulfilment of the trust’s objectives.
Choosing a trustee
Bearing this in mind, the Trustees must be chosen with great care and after accepting the role may not delegate, renounce, or resign their responsibility unless an acceptable successor consents to being the replacement.
Unless specifically prohibited by the terms of the Trust, a professional Trustee can be paid for their services, and any support assistance required by the Trustee as part of carrying out their duties (which can include legal services, financial services or investment advice required to carry out the responsibilities of a Trustee).
So if asked to be a Trustee, it is advisable that an individual should consider whether they feel able to deal with the duties, and whether they can put aside their personal views, if required to do so.
Contact Simply.Law on 0800 368 6338 to speak with an adviser or use our contact form to arrange a call-back.
