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What is a trustee?

There is a technical definition of a trustee which talks about fiduciary duties and legal responsibilities but that does not mean much to most people, so what is a trustee in simple terms?

A trustee is a personal who looks after money or property for the benefit of another. This arrangement is usually set up by a third party in a formal structure like a deed made during lifetime or in their will. The trustee becomes the legal owner of the asset ie the bank account, shareholding or property. The person they look after the asset for is called a beneficiary. It is the job of the trustee to make sure the assets is properly looked after until the beneficiary is old enough to receive it or enjoy the benefit of it.

A person could make a trust and appoint trustees for a number of reasons ie to protect vulnerable family members, to save inheritance tax or to protect assets from care charges so the reason the trustee has been appointed could differ according to circumstances. A trustee of a trust set up for a disabled child will have very different responsibilities and decisions to make than a trustee of a trust set up to help with inheritance planning.

The responsibility of being a trustee is not a small one. If you take on the role of trustee you will have legal responsibilities and duties which you must consider and follow. Some of these rules will be written in the trust and some will be contained in legislation. It is important to make sure you understand what you are being asked to do and confirm your responsibilities before you agree to be a trustee. Make sure you have seen a copy of the trust and you know what assets are held within the trust. Make sure you have seen any letters of instruction written by the person who has set up the trust and get to know the beneficiaries you may need to help in the future. Take some expert advice on what you will be expected to do - will the trust need to be registered with HMRC, will you have to prepare accounts and tax returns, how do you go about investing money? An investment of time in this advice will be invaluable for the future.

Once you have the answers to all these questions and you have read the trust and understand what you need to do you can then decide whether you want the job!

If you want or need some help in deciding whether you want to be a trustee for a friend or family member we are happy to talk it through. You can make use of our free 15 minutes review service by emailing to make an appointment if you want!

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