Duties of a Trust

Trustees must follow certain statutory rules and as well as any terms outlined in the trust Deed. In general, most things which a person should or would want to do with their own money or assets can be done by the trustees. For example, trustees can open and operate a trust bank account, invest money and buy and sell property.

However, the trustees should always seek the appropriate advice before making any of these decisions. The role of a trustee should not be undertaken lightly. Trustees can be held personally liable for any mistakes they make and a trust will often continue for many years (to a maximum of 125 years) known as the perpetuity period.

For these reasons, settlors will often choose to appoint professional trustees.

Trustees must:

Disclose any circumstances where they might have a conflict of interest with a
beneficiary. If a beneficiary owes a trustee money, this should be disclosed.

Ensure that all the trust assets are transferred to them and that these assets are protected. Trustees must also ensure that trust assets are kept completely separate to their own assets.

Not act in conflict with the interests of the beneficiaries or profit from their role as

Ensure they know what the terms of the Trust are and that they are carried out.

Ensure that they do not act beyond the terms of the Trust and their powers given by it and those given by law.

Ensure that trust records and accounts are kept and are compliant with all the
required reporting standards for trusts and ensure any tax is calculated and paid on

Take independent financial advice at appropriate times. This does not preclude the use of common sense. The Trustees must also ensure that the advice taken is in accordance with any legislative provisions. The ultimate decision over what to invest in is the Trustees’ decision. It cannot be delegated.

Act impartially and fairly between multiple beneficiaries and those who are
beneficiaries now and those who will be in the future.

Undertake regular meetings and to consider the beneficiary’s individual needs.

Act jointly. Trustees should not normally delegate functions to each other. Trustees
are jointly liable for mistakes and should act together.

Not charge fees. Only professional Trustees can charge fees.

Ensure the beneficiaries are kept informed to avoid disputes.