Trustee Duties and Responsibilities

As fiduciaries, trustees have important duties and responsibilities in administering a trust. Their primary obligations revolve around acting in the best interests of the beneficiaries and managing the trust assets prudently.

Trustee Responsibilities

It is crucial for trustees to understand and fulfil their duties and responsibilities diligently. Breach of trustee duties can lead to legal consequences and potential liability.

Key trustee duties and responsibilities include:

• Duty to observe the terms of the Trust: Trustees must adhere to the provisions and instructions outlined in the trust document. They must understand the terms of the trust and carry out their responsibilities accordingly, such as making distributions, managing investments or fulfilling specific requirements.
• Duty to act impartially between the beneficiaries: Trustees must treat all beneficiaries fairly and impartially, considering their respective interests and needs. They should avoid favouritism or discrimination and make decisions that balance the interests of all beneficiaries.
• Duty to exercise reasonable care: Trustees are expected to exercise reasonable care, skill and diligence in managing the trust assets. They must act prudently, considering the specific needs and circumstances of the trust. This includes making informed investment decisions, monitoring assets and seeking professional advice when necessary. The standard of care required by law is higher for a trustee who is being paid to act and for those who hold themselves as experts.
• Duty not to profit from the trust: Trustees must avoid any conflicts of interest. They must prioritise the beneficiaries’ interests over their own and make decisions that benefit the beneficiaries.
• Duty to act personally: Trustees may delegate certain tasks or responsibilities to professionals, such as investment advisors or accountants. However, trustees have a duty to exercise caution and prudently select and oversee these professionals to ensure they act in the best interests of the trust.
• Duty to act unanimously: Trustees must act unanimously unless there is contrary provision in the trust instrument.
• Duty of confidentiality: Any information obtained by a trustee in confidence must be kept confidential.
• Duty to disclose information: A beneficiary must be able to enforce the trust and make the trustees account for their actions. In order to do so, it follows that beneficiaries ought to have a right to receive sufficient information. Trustees should keep a record of all information they may reasonably be asked to disclose. This would include trust accounts.
• Duty to keep accounts: Trustees have a duty to maintain detailed and accurate accounts of all trust-related activities, including financial transactions, investments and distributions. These accounts serve as evidence of the trustee’s compliance with their fiduciary duties.
• Duty to preserve and protect trust assets: Trustees are responsible for safeguarding the trust assets and ensuring their proper management. They must exercise due diligence in maintaining the assets, protecting them from loss and taking appropriate steps to preserve their value.
• Regulatory duties: Trustees have regulatory obligations such as the Trust Registration Service and tax returns with which to comply.

Why choose Price Slater Gawne?

Trustees should seek guidance from legal professionals to navigate their responsibilities effectively and ensure compliance with applicable laws and regulations. Our specialist team is experienced in all aspects of trustee duties. If you would like to speak to a member of the team, please contact 03333 058375 or email wealthprotection@psg-law.co.uk.