Legal News | 10.07.25
The Duties of a Trustee
Have you ever had to consider appointing trustees or been asked to act as a trustee but are unsure about what this actually means? The Private Client team at Wansbroughs addresses the role of a trustee and what it entails.
What is a trustee?
Trusts can be created in different ways and for different reasons, such as managing finances for a minor, protecting assets for future generations or for tax reasons. They may take effect immediately or through the operation of someone’s Will. The trustees are those persons given responsibility for the ownership of the trust’s assets and who are tasked with applying those assets for the benefit of the beneficiaries. Almost any adult can act as a trustee (whether in a professional capacity or not).
What are the main duties of a trustee?
The duties of a trustee are fiduciary. This means that a trustee must always act in the best interests of the beneficiaries. The duties are far-reaching and may derive from both statute and the instrument governing the trust.
Although this list is not exhaustive, principally a trustee must:
- act honestly, in good faith and with integrity, exercising a reasonable level of care in their actions;
- understand and act in accordance with the terms of the trust instrument;
- take legal ownership of the trust assets and safeguard those assets;
- take an active role in decision-making;
- exercise investment powers to maximise the trust assets without doing so irresponsibly;
- balance the interests of different beneficiaries, ensuring all beneficiaries are considered;
- not delegate their role (unless permitted by statute), particularly when it comes to deciding how assets of the trust should be distributed; and
- keep accurate accounts for the trust and comply with the trust’s tax and reporting obligations, which may be complex.
What can happen if you get it wrong?
If a trustee fails in their responsibilities by contravening the terms of the trust or failing to carry out their duties properly, there may be serious consequences for the trustee personally. Breaches may range from the relatively minor (such as failing to keep proper accounts) to the more extreme (such as distributing assets to beneficiaries not entitled to receive them, or using the trust assets to benefit themselves).
There is no objective test for a breach of trust and the consequences of failing in their duty could include a trustee having to compensate the trust from their own personal funds, or being removed from their role.
How can we help?
The risks and responsibilities of being a trustee can be a daunting prospect, especially for trustees who do not act in a professional capacity and may not fully understand the extent of their obligations. Our team can offer specialist advice on the creation, administration and taxation of all types of trusts big or small, new or old.
If you are already involved in a trust or would like further information about whether a trust might be suitable for you or your family please do not hesitate to contact the Private Client Team at wealth@wansbroughs.com.
