Should I ask a family member to be my Trustee?
The duties of a Trustee can be complex and onerous. Choosing your Trustee is a personal decision and in choosing your Trustees, you should think about any relevant knowledge and experience they have which can provide you with the confidence that your wishes will be properly fulfilled.
There are a number of qualities and key skills to look for when choosing your Trustee and we will explore some of these here.
Can you be sure that they will act in the interests of your beneficiaries at all times? A Trustee cannot seek to or realise personal gain from their position as Trustee and they must keep the Trust assets completely separate from their own assets. Do you consider them to be honest? Do they have strong moral principles? Can you trust them with your money and assets and to look after your beneficiaries?
Would they want to act? You should bear in mind that there is no obligation for your chosen Trustee to act if they are unable or unwilling to. Trustees can be personally liable if things go wrong, even if unintentionally and so this will be off-putting for some. Would you want to burden them with such a heavy responsibility?
Can they remain objective and not be influenced by personal feelings or opinions when making decisions? Will they treat your beneficiaries fairly? Can they be trusted to use their discretionary powers and make decisions wisely? Will they treat the interests of the beneficiaries evenhandedly?
Do you think they are competent? Have they had any relevant experience that can help them in their role as Trustee? Have they been a Trustee before? Do they have financial acumen and astuteness? Are you confident that they can manage and look after your Trust asses competently, prudently and diligently as they would if they were their own assets?
The maximum period for a Trust is 125 years. Naturally no individual will survive for this long and so how can you ensure continuity and that your Trustees act consistently throughout? Have you considered the age of your Trustee and their general health?
Your Trustee may be questioned or challenged by the beneficiaries from time to time, how would they deal with that? How would they handle any dispute in the event one arose? Are they resilient?
Duty of Care
Will your Trustee communicate openly with your beneficiaries and keep them informed? Will they make the effort to understand their individual needs? A Trustee has a duty to provide beneficiaries with information necessary to protect their interests in the Trust.
Have you considered appointing a professional Trustee?
Some people may be concerned that appointing a professional will mean that their families will lose control but appointing a professional should bring peace of mind; not anxiety. A professional Trustee provides independence, as well as continued stability, professionalism and investment proficiency.
Some of the benefits of appointing a professional are:
Knowledge - to relieve the burden of keeping up with ever changing legislation, taxation and regulation, which is becoming more onerous and complex.
Expertise – As professionals, they deal with Trust administration every day and so will not be phased by any complexity which may arise, such as finalising the tax, selling properties and managing investments. By appointing a professional, you can be confident that your Trust is in safe hands and will be dealt with correctly and efficiently.
Continuity – A professional company doesn’t pass away or become incapable and so you can be reassured that there will always be someone who is capable of managing your affairs.
Impartiality – A professional can ensure that matters are dealt with impartially, especially if there is any tension within your family. They will always act in the best interests of the trust and all of the beneficiaries, they will not take sides.
You can find out more about the duties of a Trustee here.