Updated: Jan 17
A couple of weeks ago we wrote a blog post dedicated to Discretionary Trusts, and we touched upon the role of a trustee. In today's blog, we're going to be discussing the role of a trustee some more.
Essentially, a trustee is someone who manages the money or assets set aside for someone else in a trust. Many people opt to set up a trust if they want to leave assets or money to someone who is unable to take responsibility for the assets themselves.
So what are the roles of a trustee? They must have the best interest of the beneficiaries at the heart of every decision they make in regards to the money or assets left in the trust - it's their 'fiduciary duty'.
In many cases, the trust includes specific instructions on what the money should be spent on which the trustee should follow. For example, a child may be left money to be spent on their education or a future property. However, in the case of a Discretionary Trust, it is the trustee's responsibility to decide how and when the money is best spent. A trustee is also usually responsible for paying tax on behalf of the trust, such as inheritance tax, income tax and capital gains tax.
Trusts can be set up both on death, via your Will, or whilst you are alive. A Trust set up in your Will only ever becomes active once you have passed away, you can therefore change your wishes as and when your personal circumstances change.
Trusts that are set up during your lifetime are often ways to plan for Inheritance Tax or streamline the probate process. You may have heard these trusts being called Property Protection Trusts or Asset Protection Trusts but they can have may different names.
If you're thinking about setting up a trust, you will likely be thinking who the best people are to appoint as a trustee. It is wise to appoint more than one person as a trustee. It's a huge
responsibility that involves a lot of time and work, so it's important that you consider this when deciding who would best fit the role.
If you're interested in learning more about trusts and trustees, get in touch with Kindred Estate Planning today.