What Is A Trustee? What Do They Do?

What is a Trust?

A trust is a legal mechanism for entrusting assets to be held by someone (trustees) for the benefit of someone else (beneficiaries).

The details of the trust will usually be set out in a trust instrument including who the trustees and beneficiaries are, what the trust property is and powers and duties of the trustees.

There are also statutory duties that will bind the trustees when acting in relation to the trust.

Trustee Meetings

The trustees will likely need to make decisions about the trust and assets, so they will need to have trustee meetings. These are likely to include a review of the trust’s investment performance, the trust accounts, tax requirements and discussions for any distributions to the beneficiaries.

Any decisions made by the trustees ought to be documented in case the beneficiaries have questions at a later date. However, depending on the type of trust involved, the beneficiaries may not be entitled to know the reasons behind a decision that has been made i.e. in relation to a discretionary trust.

Duties of a Trustee

The trustees will not only be responsible for managing, maintaining and investing the trust assets, but they will also be responsible for making sure that any tax obligations are met. For example, there might be a trust tax return that needs submitting.

Other trustee duties can include:

• Acting in the best interests of the beneficiaries
• Acting impartially
• Not profiting from their role as a trustee
• Acting personally
• Acting unanimously
• Ensuring confidentiality
• Keeping accurate records and accounts

Trustees owe the beneficiaries a duty of care which is legally enforceable if breached.

Breach of Duty

A breach of a trustee duty can happen where a trustee has not complied with their trustee obligations implied either by the trust instrument itself or law.

A trustee can be found personally liable for a breach of the trust which means that the trustee could be sued personally for any loss arising.

Trust Registration Service

The TRS (Trust Registration Service) is an online register of trusts which is operated by HMRC. Certain trusts must now be registered with TRS and there are financial penalties for non-compliance.

When registering a trust, information will need to be provided in respect of the trust such as the trust name, who set up the trust and who the beneficiaries and trustees are.

How Can Timms Help?

For further information on trustees, please contact us on 01332 364436 or via email at legal@timms-law.com.