Legal News | 3.11.22

Delegation of Trusteeship

A trustee is someone who is responsible for managing money or assets (“the Trust Fund”) that have been placed in a trust for the benefit of a beneficiary or beneficiaries. The role of a trustee often involves extensive administration, often without financial reward or benefit for the trustee.

Fortunately, it is possible for a trustee to delegate their powers to others if required. There are two forms of delegation available to trustees:

• Collective Delegation – whereby trustees can delegate certain functions, as a collective body, to an agent, for example to a solicitor or investment manager.
• Individual Delegation – when an individual trustee, who is unable to act for a period of time, delegates his power and his discretions to another person.

Collective Delegation:
The trustees may wish to delegate a variety of their administrative powers and instruct an agent to carry out these powers on their behalf. In addition, a trustee has a duty to act in the beneficiaries’ best interests and so it is important that the trustee takes advice from appropriately qualified people. For instance, trustees may wish to instruct a solicitor to carry out the legal work for the trust and an investment manager to deal with the trust’s investments. This will help to ensure that the trust is being administered in a way which fulfils this duty.

Whilst trustees can delegate most of their functions which relate to the administration of the trust, they are unable to delegate ‘dispositive’ powers or discretions which involve the distribution of the trust fund, or the power to appoint additional trustees.

Individual Delegation:
If one trustee is going abroad for a length of time, or is about to go into hospital for a prolonged period, then they can appoint an agent (known as an “attorney”) to take over their duties for a maximum 12 month period whilst they are unable to act. The attorney will have unlimited powers to carry out any of the acts which the trustee is capable of doing.

This is beneficial if the trustee is likely to be unavailable for any period of time, as trustees are under a continuing duty to play an active role in the trust’s affairs. The trustee however, remains liable for the acts and defaults of the attorney as if they were the acts or defaults of the trustee. The attorney can only act while the individual trustee has mental capacity.

If you have queries regarding trusteeship or trusts in general, please do not hesitate to get in touch with your usual contact at Wansbroughs or by contacting us at wealth@wansbroughs.com.