When someone sets up a trust, they appoint people as trustees to manage the trust and its assets. The trust deed will usually include specific instructions about how to do this but there are some general legal duties that apply to the role as well.
This guide explains some of the basics for settlors, beneficiaries, and trustees themselves.
What are the duties of a trustee?
Trustees must comply with the various Trustee Acts. A trustee owes duties of honesty, integrity, loyalty, and good faith to the beneficiaries of the trust. They must act exclusively in the best interests of the trust and be actively involved in any decisions.
The general duties of trustees are:
- To observe the terms of the trust - Trustees must learn the terms of the trust and comply strictly with the duties and directions set out in the trust deed.
- To act impartially between beneficiaries - Trustees usually have a duty to ensure that one beneficiary shouldn't suffer at the expense of another. It's common for a trust deed to require that trustees balance potentially competing interests for income and capital.
- To provide information - Trustees must keep clear and accurate accounts for the trust. It can be helpful if trustees provide beneficiaries with relevant information or documents relating to the trust. However, trustees may wish to seek advice in this regard as there's no obligation to share all information and documents with the beneficiaries.
- To act unanimously - Trustees must act unanimously unless the trust deed says otherwise.
- To act carefully and distribute assets correctly – for example, in a life interest trust, the trustees must distribute any income to the life tenant beneficiaries but still preserve the value of the capital for any remaindermen. The rights of beneficiaries will vary depending upon the specific wording of the trust deed, and trustees should take legal advice if they are unsure of their obligations.
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Can I get help with my duties as a trustee?
Managing a trust can be complicated, with new and unexpected challenges arising every day. Every trustee can seek professional help with their duties to make sure they’re acting in the best interests of the trust and its beneficiaries.
You might consult:
- Accountants
- Solicitors
- Financial planners
- Property consultants.
Our specialist trusts solicitors can advise you on every aspect of your role as trustee, from day-to-day administration to disputes with beneficiaries or other trustees. Our tax, wealth structuring, and property experts can also help you get the most out of the trust for its beneficiaries.
If you or any other trustees are struggling to manage your duties, you can step down from your position and appoint us to serve as trustees in your place. Speak to our team on 0370 1500 100 to find out more about our professional trustee services.
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What happens if trustees don't comply with their duties?
If a trustee doesn’t comply with their duties and responsibilities, the trust beneficiaries can apply to the Court to have them removed. The Court can also direct the trustees on how to correctly administer the trust.
We can help beneficiaries who haven’t received an expected distribution from a trust. This could be because the trustees have declined to provide for them or because the trust assets have been poorly invested or used for other purposes.
We can also help you if you’ve been accused of failing in your duty as a trustee.
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Can new trustees be appointed?
The trustees can appoint a replacement to succeed any trustees that agree to step down or retire from their position.
The Court can appoint replacements for any trustees that they remove for neglecting their duties.
If you don’t know anyone suitable to act as a replacement trustee, you can appoint us instead through our trust corporation. See our Trust Administration Services page to find out more.
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What happens if trustees disagree on how they manage a trust?
For most trusts, the trustees must make decisions unanimously. This can cause problems if the trustees disagree about what’s best for the trust and its beneficiaries – unless you agree, you might not be able to do anything at all.
We can help trustees resolve disputes and help them get on with managing a trust. We can:
- Examine the trust deed and give precise legal advice about its instructions for trustees
- Represent you in discussions with other trustees
- Use Alternative Dispute Resolution techniques such as mediation to help you agree a solution
If necessary, we can take your dispute to court if we feel that other trustees are failing to act in the trust’s best interests. We can also defend you against such claims yourself.
See our Trusts Disputes page for more information about how we can help.
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What can beneficiaries do if they disagree with how a trust is being managed?
We can help remove negligent trustees from a trust. But there may also be cases where you disagree with one of the trustees’ decision even if it doesn’t strictly contravene their duties or the conditions of the trust.
Our team are skilled negotiators and we can represent you in discussions with the trustees to help resolve your disagreement about the trust and find a solution that’s agreeable to everyone.
We may even be able to negotiate the replacement of trustees when your relationship has broken down.
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Contact us
If you have any other questions about how we can help trustees with their duties, or if you'd like us to act as a trustee for your trust, call us on 0370 1500 100 or contact us online.
