A Trustee is the person appointed to manage assets held in a trust. They take legal responsibility for those assets and manage them for the benefit of beneficiaries. However, the trustee must always follow the instructions written in the trust or Last Will and Testament.
The law requires trustees to act with honesty, care and loyalty. Trustees must always act in the best interests of the beneficiaries. Lawyers describe this responsibility as a fiduciary duty. This duty means trustees must place the beneficiaries’ interests before their own.
Trustees cannot use trust assets for personal gain unless the trust specifically allows it.
What Does a Trustee Do?
Trustees carry out several duties when managing a trust. These duties help ensure that the trust works correctly and that beneficiaries receive the support intended for them. Trustees must manage the trust responsibly and carefully at all times.
Typical trustee responsibilities include:
- Managing the protecting trust assets (such as property or savings)
- Following the instructions written in the trust or Will
- Making decisions that benefit the beneficiaries
- Keeping accurate records of decisions and financial transactions
- Communicating important information to beneficiaries
- Paying relevant taxes on behalf of the trust
- Distributing money or assets to beneficiaries at the correct time
Trustees sometimes need specialist support. For this reason, trustees may appoint professionals such as accountants or solicitors.
What Powers Does a Trustee Have?
Trustees usually receive specific powers that allow them to manage trust assets effectively. These powers appear in the trust document or Will.
Typical trustee powers may include:
- Investing trust money to generate income or growth
- Selling or managing property owned by the trust
- Paying income to beneficiaries
- Lending money to beneficiaries in certain circumstances
- Appointing professionals to assist with trust administration
The law also provides certain powers. For instance, the Trustee Act 2000 sets out rules that guide trustees when managing investments. However, the trust document may expand or restrict these powers depending on the wishes of the person who created the trust.
Who Can Be a Trustee?
Most adults can serve as trustees. However, they must meet certain basic requirements.
Generally, a trustee must:
- Be over the age of 18
- Have mental capacity to make financial decisions
- Be trustworthy and responsible
- Have the ability to manage financial or administrative tasks
People often choose family members or professional advisors to act as trustees. In many cases, Wills appoint more than one trustee. This can help improve decision-making and reduce the risk of disagreements.
Where a trust includes property or land, the law normally requires at least two trustees.
How Many Trustees Should You Appoint?
Although a trust can operate with one trustee, many people appoint two or more trustees.
Having multiple trustees offers several advantages:
- Shared responsibility when making decisions
- Greater oversight and accountability
- Continuity if one trustee cannot continue in the role
The law normally allows between one and four trustees. However, many families choose two or three trustees for practical reasons.
What You Should Consider Before Accepting the Role
Serving as a trustee carries significant responsibility. Therefore, anyone asked to become a trustee should think carefully before accepting the role.
Common considerations include:
- The role may last many years
- Trustees must make decisions that affect other people’s finances
- Trustees must keep accurate financial records
- Trustees must cooperate with other trustees when making decisions
- Trustees may face legal responsibility if they act improperly
Although the role involves responsibility, many people view the appointment as a sign of respect and trust. If someone asks you go act as a trustee, you may wish to discuss the role with them first.
What is a Trust?
A Trust exists when someone sets aside money, property or other assets for the benefit of another person. The trust ensures that the assets get managed responsibly and used for the correct purpose. A trust also separates legal ownership from the right to benefit from an asset. The trustee holds the legal ownership and manages the asset. Meanwhile, the beneficiary receives the financial benefit from it.
Most trusts involve three main people:
| The Settlor | The person who creates the trust and places assets into it |
| The Trustee | The person responsible for managing those assets |
| The Beneficiary | The person who benefits from the trust |
Trusts often appear within Wills. For instance, someone may leave money in trust for a child until they reach a certain age. In other cases, a trust may provide financial support for a vulnerable or elderly relative. Trusts also help protect assets. They ensure that money reaches the intended person at the right time and gets used for the correct purpose.
Why Do People Use Trusts in Wills?
Many people creates trusts within their Wills to protect assets or manage inheritance carefully. Additionally, trusts often help when beneficiaries cannot manage assets themselves.
Common situations include:
- Leaving money to children under the age of 18
- Providing financial support for someone who lacks mental capacity
- Setting aside funds for long-term care costs
- Protecting family property until beneficiaries reach a certain age
- Managing assets for vulnerable loved ones
In these cases, trustees manage the assets until the beneficiary can receive them safely and responsibly.
Trustees vs Executors
People often confuse trustees and executors. Although the roles sometimes overlap, they perform different functions.
Executors manage the estate after someone dies. They apply for probate, while also settling debts and distributing inheritance. On the other hand, trustees manage assets placed into a trust once the estate administration finishes.
Sometimes, the same person acts as both executor and trustee. In other cases, a Will appoints different people for each role. Executors usually complete their duties once the estate administration finishes. Trustees may continue managing trust assets for many years.
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This article is for general informational purposes only and does not constitute legal or financial advice. While we aim to keep our content up to date and accurate, UK laws and regulations are subject to change. Please speak to a professional for advice tailored to your individual circumstances. Will Guardian accepts no responsibility for any issues arising from reliance on the information provided.