Trusts are a powerful and flexible tool for managing and protecting assets, whether for family members, charitable causes, or business purposes. At the heart of every trust is a trust’s trustees – individuals or an entity responsible for managing the trust’s assets and ensuring they are used in accordance with the trust’s terms. While many people appoint family members or close friends as trustees, there is growing recognition of the benefits of appointing a professional trustee.
Being a trustee can often be a daunting task and it’s common for those appointed as these roles to not realise they can be personally liable if things are not done correctly.
A appointing a professional trustee gives you peace of mind everything is being done correctly, and in the most efficient way possible. Trustees have a legal obligation to act in accordance with the Trust and have a legal obligation to act in the best interests of the beneficiaries. If this is not being done, a claim can be made against them on the ground of Breach of Fudicial Duty.
In short, no. Whilst a professional trustee can be appointed in the Will and the Trust, it is possible and common for the appointed trustee(s) to appoint a professional to act alongside them at the time.
A trustee is required where the Will creates a trust or directs assets into a trust.
In very simple terms, a trustee assumes responsibility for the money and assets in the trust for the beneficiaries. The trustee will manage the money and assets on their behalf and have a legal obligation to only act in the best interests of the beneficiary and follow the rules of the trust.
There are many different types of trust, with each trust having its own set of “rules”. For example, the Will may create a Children’s Trust or it may create a Discretionary Trust, or even Interest in Possession Trust. All three have very different rules, different taxes, different reporting requirements, and they may be flexible or they may be rigid. For these reasons, it’s very common for a Professional Trustee to be involved.
A trustee is required to:
Appointing a Professional Trustee gives peace of mind that the Trust can be managed both correctly and in the most tax efficient manner possible.
Periodic and exit charges are applicable with some types of trust – a Professional Trustee will know the best and most efficient ways to lessen these, meaning more funds for the beneficiaries… all whilst ensuring the assets remain protected.
When considering whether to use a Professional Trustee, it’s important to remember “it’s what they do” – they know the best ways to keep assets protected, they know the most tax efficient ways to manage the assets, they know what they are doing. You take your children to the doctors when they are unwell, because doctors know what they are doing. You take your car to a garage when it needs fixing because they know what they are doing. A Professional Trustee is no different.
As with a Professional Personal Representative, having a Professional Trustee guarantee impartiality for all decisions and removes the risk or conflicts of any form of bias, personal or emotional complications (i.e. they can easily act within the best interest of the beneficiaries and the estate) whilst removing the added stress to families and loved ones for the duration of the trust (which can continue throughout generations).
At Kinherit, we have a panel of trusted and regulated firms who we can put you in touch with who offer these services. Each firm operates differently when it comes to their fees, but these are always discussed with you at the outset before you decide whether you want to proceed.
We do not provide professional trustee services in house, as we believe it is a conflict of interest.
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