The Duties Of A Trustee

Trainee Solicitor, Leonnie Watson, discusses the duties of a trustee in her latest blog…

Trusts are legal entities that are established to hold assets for nominated beneficiaries. Trusts provide legal protection for those assets and assist in ensuring that the assets that the trust is protecting are distributed according to the trustor’s wishes either during their lifetime or following their death.

When a trust is made, a trustor will appoint at least 2 people of their choice or an entity (such as a bank or a firm of solicitors) to manage the trust and its assets. These are known as ‘trustees’. The trustees will hold the legal title of an asset or group of assets for another person or people, known as beneficiaries. Although the trustee is the legal owner of the property, they own it for the benefit of the trust.

The general duties of the trustees are (but not limited to):

• To observe the terms of the trust and comply strictly with the duties and directions set out in the trust deed;
• To act impartially between beneficiaries (i.e. not allow one beneficiary to suffer at the expense of another);
• To keep clear and accurate accounts for the trust and provide beneficiaries with any information or documents relating to the trust that they ask for; and
• To act unanimously unless the trust deed says otherwise.

There are different types of trusts, but no matter what type of trust a trustee is appointed as a trustee for, they must use the utmost care and loyalty when managing it and cannot use it for their own personal gain. A trustee is legally required to work in the best interests of the trust and its beneficiaries. For further information on the different types of trusts, please click the below link to my colleague, Matthew Kelly’s blog about this… What Is A Trust? Which Is The Right Trust? – Timms Solicitors (timms-law.com)

If a trustee does not comply with the duties and responsibilities expected of them, the trust beneficiaries can apply to the Court to have them removed as trustees. The Court can also direct the trustees on how to correctly administer the trust. Hopefully this would not happen, however it is very important to know not only the duties of a trustee, but also the consequences what could happen if the trustees do not act within their duty.

Trustees can also consult professionals such as accountants, financial planners or solicitors to get the most out of the trust to for the benefit of the beneficiaries. Some may also want to step away from their position as a trustee and appoint a firm of solicitors to serve as trustees in their place.

If you would like any further information on trusts, please contact me or any of my colleagues on freephone 0800 011 6666.

Leonnie Watson
July 2021