Taking on the role of a trustee is not something to take lightly. It carries a lot of responsibility and risk. You can be appointed as a trustee under a will, or stand as a trustee of a trust established during someone’s life. Either way, there are specific duties you will have to comply with. Solicitors Chester can help you with the process.
What is a trust?
A trust is a means of managing money or assets for someone else. There are three main roles involved; the settlor, beneficiary, and trustee.
The settlor is someone who controls putting the money or assets into a trust. The beneficiary is someone who is benefitting from this trust, and the trustee is someone who manages it.
How is a trustee chosen?
In the circumstance of Will trusts, unless stated otherwise, those chosen as the Will executors will also act as a trustee of trusts left in the Will. In other matters, such as a fund set aside for someone under the age of 18, a family member is usually invited to take on the role.
At least two trustees for a fund is usually recommended, although if it is on land, then there is a maximum of 4 trustees. All need to come to the same decisions over the investment/fund, so the more trustees, the greater room for disagreement.
What does a trustee do?
A trustee’s main responsibility is, to be honest, loyal, integral, and be of good faith to the beneficiaries of the trust/investment.
To comply with the rules, any appointed trustees must first learn and understand the terms of the trust. These are set within a deed, usually a will or insurance deed. They establish any beneficiaries of a trust and outline anything a trustee will need to follow. The trust deed may ask the trustees to carry out actions too.
Trustees must treat all beneficiaries fairly – they cannot allow one to suffer at the expense of another. They must keep a record of all their decisions so that they can provide a beneficiary with the correct information if requested.
Can a beneficiary be a trustee?
Both the Will settlor and/or beneficiary of an estate can be a trustee. However, if this is to happen, it can lead to a conflict involving who receives what. Only the trustee can access a fund – so this is especially true when trustees can decide how much the beneficiaries can benefit.
