Trusts Solicitor Essex

As a Trusts Solicitor Essex, I have been advising on this topic for over 25 years. A trust will always be created by either a Settlement Deed or a Will. The person creating the trust is known as the Settlor, the individuals tasked with holding assets are the trustees and people the trust will benefit known as beneficiaries. 

Who can be a trustee?

Anyone over the age of 18 can be a trustee, but it may be best to avoid the following types of individual: –

• Undischarged bankrupts and those with arrangements with creditors.
• Individuals who have shown a lack of sensible financial management.
• Anyone who has been convicted of an offence involving dishonesty.
• Potentially beneficiaries should be excluded as trustees if there could be some form of conflict in terms of their role as a trustee.
• Anyone who lives outside the UK.

An appropriate choice for a trustee would generally be either a family member or experience professional trustees. I have acted as a trustee on many occasions across a raft of different sets of circumstances.

What do trustees actually have to do?

Trustees have to manage the assets of the trust. They may delegate some of the investment arrangements, authorising any such arrangements. Any decisions must be made by the trustees  and trustees must act unanimously. It is not possible for trustees to put matters to a vote where the majority can carry a decision. Trustees have to sign paperwork and authorise decisions being made.

Trustees are generally empowered by a set of powers included within the Settlement Deed or Will. They would normally need to ensure that they are looking after the beneficiary or beneficiaries and catering for their requirements under the trust.

Of course, trustees can take advice from professionals like financial planners, solicitors and accountants. It would be usual for an accountant to act on behalf of trustees on an annual basis, completing tax returns.

What duties must trustees carry out?

Trustees generally must do the following: –

• Avoid any conflict of interest with a beneficiary.
• Not profit from the role as a trustee. Professionals are permitted to be paid usual charges from a trust provided there is a charging clause within the relevant document.
• Keep trust records and accounts and pay any tax on time.
• Take independent financial advice where needed. Trustees must review investments that they hold on a regular basis.
• Act fairly between any multiple beneficiaries. For example, with a life interest trust, generally the trustees must observe the life tenants right to receive income during their lifetime and also the remaindermen beneficiaries’ right to capital growth.
• Trustees must take reasonable care and certainly professional trustees must take more care than lay trustees.

What happens with tax that must be paid by the trust?

Generally all trusts will be liable to tax while they hold assets. A trust would normally have to pay income tax and also possibly have to pay Capital Gains Tax and periodic Inheritance Tax depending on the type of trust. Trustees must ensure that all tax due is accounted for and paid. Often accountants would deal with this aspect on an annual basis on behalf of trustees.