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Who can be a Trustee?
In principle, any person can be a trustee except an individual under 18 years of age.
Choosing your Trustee
Your trustee should be somebody who you can, literally, trust to manage the trust in the best interests of the beneficiaries. Different types of trustee offer different advantages. The options are:
- An individual trustee, eg. someone who knows you and your family personally (usually a minimum of two trustees are required)
- A corporate trustee
- A professional trustee, whether individual or corporate
Why do I need a Professional Trustee?
Trusts can be set up for a variety of reasons such as tax planning, protecting assets from care home fees or relationship breakdown, or preserving family assets.
However, a trust will only protect assets if the trustees carry out their duties correctly. This includes administering a trust properly. If trustees don’t comply with their duties, allegations can be made that the trust is a sham and if those allegations are substantiated, asset protection can be lost. Ultimately, this can result in the trust assets being made available to satisfy claims, for example claims by creditors.
Having a professional trustee is not legally necessary, but it can be an enormous advantage if the others are unfamiliar with the obligations of the role. Professional trustees are usually well acquainted with trustee duties and what action has to be taken to satisfy those legal responsibilities. Generally speaking, their function is to work with the other trustees of the trust in looking after the beneficiaries, the trust assets and in administering the trust. The difference is that a professional trustee is trained to understand what has to be done when running a trust. For instance, a professional trustee can arrange meetings, make decisions, look after the trust assets and correctly document and administer trust affairs.
Furthermore, trustees are personally liable to all of the beneficiaries of a trust. Ignorance of their trustee duties is no excuse if the trust is not administered properly. Having a professional trustee can help avoid any breaches of trustee obligations.
Additionally, the presence of a professional trustee who does their job right can demonstrate that the trust is real. Assuming the professional trustee carries out their functions properly, the chances of a successful allegation of sham trust should be minimised.
Professional trustees are also very useful for when there are warring beneficiaries or conflicts between the parties. The professional trustee can act neutrally in the best interests of all the beneficiaries and act as a mediator.
What to do next?
Here at Myerson Solicitors, our Wills, Trusts and Probate team are highly experienced in drafting and administering trusts and can also act as professional trustees on your behalf. If you would like assistance, please do not hesitate to get in touch at lawyers@myerson.co.uk or call us on 0161 941 4000.