A trustee is someone appointed to manage money or other assets that are held in a trust for the benefit of one or more third parties, known as beneficiaries.
A trustee has a range of responsibilities, including dealing with the day-to-day administration of the assets in the trust, ensuring the beneficiaries’ rights are safeguarded and following the instructions set out in the document that set up the trust.
A Will is often used to establish a trust. For example, if someone wants grandchildren to benefit from a lump sum, the money can be put in trust and distributed to them or their parents in accordance with the wishes expressed to the trustees.
Below, we explain how to appoint a trustee, the role of a trustee and how to remove a trustee from their position.
What Does an Executor Do?
An executor is someone appointed in a Will to deal with the winding up of the estate after the death of the person who made the Will, known as the testator. The role of an executor carries a wide range of responsibilities. One or more executors can be appointed.
The key tasks for an executor after the death of the testator include:
- Ensuring the death is registered with the local register office
- Locating the Will
- Securing the deceased’s assets, including arranging insurance for property and vehicles
- Valuing the estate by identifying and valuing all assets and liabilities
- Calculating and paying Inheritance Tax
- Applying for a Grant of Probate, unless the estate is a small estate
- Distributing the estate and obtaining receipts for payments
Dealing With Your Estate
When you write a Will, you need to decide who you want to deal with the administration of your estate and how you want to leave your assets.
By appointing trustees, you can ensure that funds are managed for the beneficiaries. This is useful if the beneficiaries are not able to have funds themselves, for example, because they are young, because they do not have the capacity to manage money or because they are facing a potential divorce or bankruptcy.
Who Can Be Appointed as an Executor?
You should choose someone whom you believe will have both the mental ability to deal with your estate administration as well as the time. It can be a lengthy and complex process, and they will need to put aside hours each week to devote to the task.
It may be advisable to choose someone younger than you to have the best chance of them being able to take on the role when the time comes.
How Do I Appoint My Executors?
Executors are appointed in your Will. You can discuss your choice with your solicitor and appoint one or more executors as well as back-ups, in case your original choice is unable or unwilling to act.
You can also appoint trustees in your Will and set up a trust. You can choose the same individuals to be your trustees and executors.
What Does a Trustee Do?
A trustee is responsible for managing assets left in a trust. There may be directions left for the trustees in a letter of wishes to assist them in making decisions.
They have a range of duties, including:
- To act in the best interests of the trust fund and the beneficiaries at all times
- To exercise a duty of care, including using reasonable skill, care and diligence when managing the trust funds, taking professional advice where necessary and keeping detailed records
- Acting with impartiality
- Not benefitting personally from the position in any way
- Avoiding any conflict of interest
Who Can You Appoint as a Trustee, and Can a Trustee Appoint Another Trustee?
You can appoint a trusted relative or friend as a trustee. You need to ensure they are happy to take on the role and that they will have the time and ability to deal with the trust fund.
Alternatively, you can appoint a professional. They will charge for their services, but you can be sure that they will be able to deal with issues promptly and that they will have the necessary expertise. Common choices are trust solicitors and accountants.
An existing trustee can appoint a replacement trustee if an existing trustee is overseas for over a year or is unable or unfit to act.
Choosing Your Executors or Trustees
You need to consider whether your choice of relative or friend is likely to be able to take on the time-consuming role. It can be complicated, and managing trust funds is onerous. Errors can result in personal liability, so you need to be sure that your choice of individual is happy with this.
You can choose someone younger than you so that there is a better chance they will be able to deal with matters in the future.
Who You Should Choose
It is common to choose a spouse, child or other close relative. If choosing a spouse, you need to be aware that they could be elderly when the time comes. If choosing one of your children, you can discuss matters with them beforehand to see whether they are prepared to take on the role.
Appointing Replacement Trustees
The Will may include provisions for replacing a trustee, should this be necessary. A deed of retirement is prepared for the trustee stepping down, along with a deed of appointment for the new trustee.
There need to be two trustees in place to run the trust.
Removing Trustees
Where there is no scope for removal of a trustee within the deed creating the trust, for example, the Will, a trustee can be removed where all the beneficiaries agree. Otherwise, it may be necessary to apply to the court for an order.
If a trustee is unable to act, for example, because they are unfit or incapable, then they may be replaced under Section 36 of the Trustee Act 1925.
Power to Appoint New Trustees
Express Power
The power to appoint new trustees is often expressly set out in the trust deed or Will. This will provide details of how a trustee can step down and how a new trustee is selected and appointed.
Statutory Power
Where the document does not provide this, then statutory power can be used, for example, Section 36 of the Trustee Act 1925. A formal deed of retirement and appointment is drawn up and signed by the parties concerned. This can be used if a trustee dies, is outside of the UK for a year or more, they wish to be released from the role, they are refusing to act, or they are incapable of acting or unfit.
Contact Our Experienced Trust Solicitors
If would like to know more about appointing a trustee, please feel free to contact us.
To speak to one of our expert Wills solicitors, ring us on 0300 303 2071, email us at info@witansolicitors.co.uk or fill in our contact form and we will talk through your situation with you and discuss how we can assist. We have offices in Birmingham, Northampton, London and Wellingborough.
