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Many people who take on the role of trustee of a family or other type of trust are not aware that there are a number of duties they must fulfil under the law. Once a Trust has been established the trustees are responsible for the day to day administration of the trust. While the duties of the trustees need not be onerous, it is important that trustees are aware of their duties and responsibilities. In the worst case, a trustee who fails in his or her duties can face a claim from beneficiaries for the loss or damage suffered by them the trustee's action or ommission.
Trustee's duties may be summarised as follow:
- To be acquainted with terms of the Trust Deed and to be familiar with the assets of the trust.
- Trustees may meet regularly to review the assets (and, if any) liabilities of the trust and check that they are being utilised in a way which is appropriate for the trust and the achievement of its objectives and which does not place its assets unduly at risk.
- An incoming trustee needs to make enquiries to ensure that the acts of an outgoing trustee have been legitimate and appropriate.
- To obey the terms of the trust.
- To act impartially and in an even handed manner between beneficiaries and groups of beneficiaries, without restricting the trustees' discretion under the Deed of Trust to make distributions to some beneficiaries to the exclusion or reduction of distributions to others.
- To maintain proper accounts and to give particulars of the trusts' property and investments to the beneficiaries. This information must be given when required even if the beneficiaries are only contingent.
- A trustee can be paid if the deed expressly provides for it.
- Trustees must act at all times in the best interest of the beneficiaries.
- Trustee must avoid all conflicts of interest with the trustees' fiduciary position.
- Trustees must invest trust assets prudently.
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