A Trustee is appointed to manage a Trust

Guide to being and appointing a Trustee

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A Trustee is the person who has been appointed to manage a Trust.

OK, so what is a Trust?A Trust is a legal way of holding money or property for the benefit of someone else.

Why would I need to set up a Trust?There are many reasons why you might wish to set up a Trust. For example, if your Beneficiaries are young and/or irresponsible and you don’t want them to receive their inheritance until they have met certain conditions (i.e. reach a certain age), or perhaps the Beneficiary is in a difficult personal situation which could place those assets at risk. Setting up a Trust is a good way of ensuring your assets are protected until your Beneficiary is ready to have them outright.

How can I set up a Trust?A Trust can be set up in a number of ways:

1. In your Will

2. By a special deed called a Deed of Settlement or a Trust Deed

3. By law because certain events have occurred resulting in a Trust coming into effect (e.g. a parent dies leaving minor children who are too young to take the inheritance, so the inheritance will go into a Trust for them until they are old enough, at age 18 years)

What can I put into a Trust?Anything you want! The most common things however are:

Land and property

Money

Investments e.g. shares

Valuable belongings e.g. jewellery, antiques and paintings

Can I put certain conditions on a Trust?Yes, absolutely. That’s one of the primary reasons for setting up a Trust in the first place. When you set up the Trust, you have the opportunity to explain how you want your Trust to work i.e. when you want the Beneficiary to inherit the assets in it and how you want the Trustee to manage it. In fact, the assets in the Trust are made up of capital value and usually generate income. You need to consider this as you should instruct your Trustees as to what to do with the capital and income (e.g. who gets it!).

What is a Trustee?

You can appoint up to four Trustees

Who can be a Trustee?A Trustee can be anyone aged 18 or over, permitting that person isn’t or is not likely to be declared bankrupt or mentally incapable. Being a Trustee is a very important role and should be given to someone responsible who is able to cope with the duties involved.

You can have up to four Trustees. Many Testators appoint their Executors to also act as their Trustees. Like an Executor, you can have professional Trustees (e.g. Solicitors, Accountants or Trust Corporations) but, as is the case with professional Executors, they can charge you to take on the role. A Trustee can also be a Beneficiary.

What does a Trustee have to do?It is the Trustee’s responsibility to protect, manage, and then distribute the contents of the Trust to the named Beneficiaries in line with the Testator’s (or Settlor’s) instructions, and in accordance with the Trust Deed and the law.

Trustees have legal ownership of the contents of the Trust and a duty to look after those assets under both the terms of the Trust Deed and the law. They must act solely in the best interests of the Beneficiaries and in such a way as to avoid any loss of value of the Trust fund. If they are negligent in their duties and these actions result in a loss of value to the assets of the Trust, then they will be personally liable to the Beneficiaries.

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