Trust Adminstration

Trust administration refers to the management and execution of a trust, according to its terms and the applicable legal requirements. It encompasses the responsibilities and tasks undertaken by the trustees to fulfil their duties and ensure the smooth operation of the trust.

What is trust administration?

The key aspects of trust administration include:

• Asset management: The trustee is responsible for managing the assets held within the trust. This involves safeguarding and protecting the assets, making prudent investment decisions and maximising their value for the benefit of the trust and its beneficiaries.
• Record keeping: Accurate and detailed record keeping is really crucial in trust administration. The trustee maintains trust accounts of all trust transactions, including income, expenses, distributions and any changes to the trust’s assets or beneficiaries. These records provide transparency, facilitate accounting and demonstrate compliance with legal requirements.
• Communication with beneficiaries: The trustees often have a tricky balance to maintain between confidentiality and disclosure of information to beneficiaries. Often the settlor of the trust will have given the trustees guidance over what should remain private between them and the trustees and what information can be given to beneficiaries. Additionally, there could be a need for confidentiality between each of the beneficiaries also. The best run trusts will have regular and clear communication channels.
• Distribution of trust assets: The trustee is responsible for distributing trust assets to the beneficiaries in accordance with the terms of the trust. This involves determining the timing, amount and method of distributions, as specified in the trust document. Where the trust instrument gives the trustees discretion of making distributions, the trustees should ensure fairness and impartiality in distributing assets among multiple beneficiaries, taking into account their respective interests and needs.
• Compliance with legal obligations: Trust administration involves complying with legal and regulatory requirements. The trustee must adhere to relevant laws, tax obligations, reporting obligations and any other applicable regulations. This includes filing tax returns, maintaining proper accounting records and fulfilling reporting requirements as mandated by the jurisdiction.
• Fiduciary duties: The trustee has fiduciary duties to act in the best interests of the beneficiaries, exercise prudence, loyalty and impartiality, and avoid conflicts of interest. Trust administration requires the trustee to make decisions that align with the purpose and intentions of the trust, always considering the welfare of the beneficiaries.

Can a solicitor act for trustees?

Solicitors can both act as a trustee through an individual appointment or an appointment of their firm’s Trust Corporation and as a legal representative of lay trustees. When acting as a trustee, the solicitor is responsible for managing all of the above aspects of trust administration. When acting as a legal representative, the solicitor will act in accordance with the scope of the instructions given to them.

Trust administration can be complex and time consuming, particularly for larger or more intricate trusts. Trustees, especially those without professional expertise, may benefit significantly from seeking assistance from legal, financial or tax professionals to ensure proper trust administration and compliance with legal obligations.

Why choose Price Slater Gawne?

Our specialist team are experienced in handling the administration of complex trusts, providing specialised knowledge and experience in trust management. 

If you would like to speak to a member of the team, please contact 03333 058375 or email wealthprotection@psg-law.co.uk.