We are handling more and more cases where individuals are asked by friends and relatives to take on this high position of trust and responsibility.
A great number of people take on this role, without taking proper advice and without having insurance in place with a view to offering a helping hand to a relative or friend. Unfortunately, agreeing to take on the role without advice or proper understanding can result in years of grief, legal costs and what some have described as a poisoned chalice.
For instance, many do not appreciate what the role carries with it - the onerous duty of being personally liable. Should things go wrong with the trust, the trustee could find themselves on the opposite side of litigation proceedings. An increasing number of beneficiaries look for someone to blame if the things go wrong with the trust and people often hold their professional advisors accountable if there is a loss to the trust or if the trustee has not acted properly to protect the interests of the beneficiaries.
Generally, trustees are governed by the Trustee Act to exercise reasonable skill and care in the circumstances of a case. A trustee's primary duty is to look after and protect the beneficiaries and by that, sometimes there is a clash of beneficiaries with competing needs and desires.
A good trustee will take advice when required on legal, financial and accountancy matters. It is not a crime to ask for help, in fact this should be encouraged where expertise is required. There are cases where the advice sought has been incorrect but the trustees are protected against a potential breach of trust because advice has been sought.
It is also important to point out that often for the lay trustee, this is not usually a paid role. This can come as a surprise to many who over years have been paid remuneration for taking the badge or title of trustee. This is not allowed and can lead to the very embarrassing and financially difficult task of repaying money to the trust many years later. Generally only professionals who are offering expertise can be paid for the privilege.
We would advise that you carefully consider whether this is a task that is worth taking on, especially if there is any hint of conflict between the parties or if the trust is short of money. It is a role that has proven for many to be far more onerous than they ever imagined and so think carefully before you commit.
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