WHAT IS A TRUSTEE?
The trustee is the individual or professional (such as a Trust Company) named in the trust deed to look after and manage the assets held in the trust.
The trustees will have certain powers provided by law to allow them to manage the assets in the trust for the benefit of the beneficiaries and the settlor will also be able to provide powers in the trust deed. Although the trust fund is transferred into the name of the trustees, it doesn’t belong to them. They are looking after it for someone else and have what is known as a fiduciary duty to that beneficiary or those beneficiaries.
WHAT DOES FIDUCIARY DUTY MEAN?
This means that the relationship of trustee and beneficiary stems from trust. The trustee has the following duties:
DUTY OF CARE
This means that the trustee must manage the assets competently, prudently and diligently as they would if they were their own assets.
DUTY TO ACT FAIRLY
The trustee must act in the interests of the beneficiaries always and cannot seek to or realise personal gain from their position as trustee or from having knowledge of the trust assets (known as the self-dealing rule).
DUTY OF IMPARTIALITY
The trustee must treat the interests of the beneficiaries evenhandedly, when considering the assets, investments and distributions made.
DUTY TO INFORM
A trustee must provide the beneficiaries with information necessary to protect their interests in the trust.