Will Trustee Explained

Trustees can be appointed under the terms of a Will. These Trustees may be the same people as the Executors, or they can be different people entirely. Their role is to manage a Trust on behalf of the beneficiaries, until the Trust is brought to an end.

Executors and Trustees  

When you make a Will, you have the chance to name one or more Executors. These are the people who will administer your estate after your death. Within a professionally drawn Will, Executors are often described as ‘Executors and Trustees’. This is because in the context of an estate administration, Executors are also fulfilling the role of a Trustee. Indeed, they are managing money for other people. They must also exercise their responsibilities with all due care so as to protect the assets, and work in the interests of the beneficiaries.

Once the estate has been fully administered, the Executor’s role comes to an end. This is when all the assets have been collected in, liabilities paid, and an estate account approved. However, there may be some ongoing matters that need to be dealt with. This might include the holding of land or money for people who are yet to reach the age of 18 or 21. Or, the settlement of money within the estate into a formal Trust governed by the terms of the Will, which could last for the next 125 years. For this reason, it is possible to expand the terms of the Will so that a Trustee’s responsibilities continue in the long-term.

The Trustees appointed under the terms of a Will can be the same people as the Executors, or they can be different people entirely. Some distinction needs to be made at the end of the estate administration as to the change in role from Executor to Trustee. This is clear cut where the Trustees are different people. When this happens, documentation is put in place to transfer the assets into the names of those Trustees. However, where you are the Executor and also the Trustee, it is a good idea to record the change of role.

Trustee responsibilities

The Trustees become responsible for receiving the inheritance from the estate on behalf of the Trust. Cash or assets are held by the Trustee in accordance with the terms of the Will, until the Trust is brought to an end by the delivery of the cash or assets to the ultimate intended beneficiaries. Trustees must act fairly towards the beneficiaries, and owe them a statutory duty of care. Trustees have powers that are contained within the Will document, along with powers which are implied and defined by statute.

Trusts should have two Trustees as a minimum, but sometimes they extend to four, one of whom may be a professional adviser. If the Trust is to last a long time, it is a good idea to ensure that at least one of them is young enough to see the Trust to its end. Although most Trusts can last 125 years, they are usually brought to an end much sooner than that. Where there are, for example, three Trustees and two die, the sole Trustee will have power to appoint one or two replacement Trustees to act alongside him or her. There is, therefore,a chain of Trusteeship. It is possible that eventually the Trustees may all be people not known to you in your lifetime. The Will should provide whether the Trustees can charge for their services.

Duties of a Trustee

The duties of the Trustees are to:

• Take charge of the assets
• Make sure the assets are safe and insured
• Register the Trust for tax purposes
• Appoint an accountant for the tax returns
• Take professional investment advice
• Have annual recorded meetings to discuss matters such as: whether the assets held need to be re-invested; whether there is a looming tax liability as a result of a possible 10 yearly tax charge; to plan for the next 12 months; and to plan for the long-term

These duties can be onerous, which is why the choice of Trustee is important. It is not unheard of for Trust monies to become mixed up with the private monies of a Trustee. Consequently, when the Trustee passes away, their personal representatives do not recognise that some of the money they are handling doesn’t belong to the estate of the Trustee. Record keeping is therefore essential and appropriate protective entries need to be made at the Land Registry in the case of registered land.

At Aticus Law, where we have drawn the Will and administered the estate, we will always ensure that the Trustees are fully advised as to their responsibilities, to ensure a safe and effective management of the Trust. Being asked to become a Trustee is a big honour but it comes with a lot of responsibility.