Selecting Trustees

When setting up a trust it pays to have a decent trustee or trustees to look after it if you expect it to run well.  When it comes to selecting trustees in England & Wales you are free to choose from family, friends, solicitors, accountants, a bank, specialist trustee firms, siblings or sometimes even a beneficiary.

Under the rules of the Administration of Estates Act 1925 a Welsh or English executor has the right to appoint a trust firm or up to two people to act as trustees of a minor’s property.  f there is not going to be a trust in place or required then this negates the need to appoint any trustees within your Last Will and Testament.  Under English & Welsh law a person named solely as a trustee would only have the legal right to deal with a trust and has no legal right to interfere with any other matters.                                                                   

Where an infant will be involved a trust, trustee and guardian should be arranged within your Will.  If you don’t set these up in your Will, you die intestate or the appointed persons do not or can not fulfil the appointment then these matters will have to be sorted out by the English or Welsh state.  In the matter of the financial welfare of your child the English & Welsh courts will arrange a child’s’ trust to be set up by the for this purpose from your estate and an official Public Trustee appointed to look after the child’s trust property.  These English or Welsh Public Trustee firms will charge fees commensurate with their work in running the trust.  In relation to the guardianship of the child; this is dealt with separately.

If you decide to choose a family member; a relative or a close friend to act as a trustee then some of the following pointers will help you make the most appropriate selection:                                            

In terms of qualities an honest person would be a must for a trustee.  Under the law in England and Wales the trustee will be held accountable for their actions; but why even take the risk in the first place.                                                    

They need to be meticulous as there is a lot of record keeping required.  

You will need someone of reasonable intelligence and with some good common sense to deal with all the intricate paperwork and make practical decisions.

Although there will be situations for the trustee to react to at times; it is best that they are proactive by nature as this type of person is most likely to keep on top of all matters that need dealing with thus ensuring the trust runs more successfully and smoothly.  A sit back attitude will cause things to slide out of control.

 As well as the characteristics mentioned above from a practical view point:

A trustee role requires lots of administrative work; so paperwork needs to be one of the strengths for the person being selected.                                                                                                          

The role requires time to fulfil so somebody with time at their disposal makes a wise choice.  A trust obviously involves handling money so select someone with financial experience; perhaps, due to their profession or choose someone proven to be good with money.

If your trust incorporates looking after property then someone with relevant experience makes a prudent choice.                                                                                                            

Select a person with Investment experience to be a trustee when your trust has a portfolio of investments to take care of.                                                                                            

If you’re placing a business into trust then it is good to select someone with a history of owning and running their own English or Welsh company.  That way they will understand the relevant rules to running a business successfully and know how to deal with the tax issues that are relevant to England and Wales.

Trusts can run on for numerous years and as a result so do the duties of a trustee.  Due to this you would not want to choose someone so old that they may not be able to see the trust through to the end because of ill health associated with old age or even pass away themselves.  Conversely; however, you would not want someone too young and inexperienced as this too could result in disaster for your trust plans.

 From time to time a trustee might need help from an expert or professional.  A trustee has the legal right to get this help and the fees payable for this expertise are paid by the trust fund.  The professionals can help with many issues that the trustee feels is necessary amongst which could be financial investing, accountancy, property and financial management or business advice.

 Trustees obviously have to take care of the money and property held in the trust.  They should do this with the overall aim of doing their best by the beneficiaries and as such it makes sense that they know and care about the beneficiary or beneficiaries involved.  You do not want them to care too much so that they are a soft touch; as then they could be easily manipulated by a beneficiary into irresponsibly dishing out money senselessly at the whim of the beneficiary.  So you want to be sure that the trustee will stick to your wishes and trust instructions.  Should you choose a professional trustee they are going to act professionally stick to carrying out the trust instructions; however, they may be too unemotional in their approach.  To counter balance the situation a relative with an emotional connection can be appointed as the other trustee.  When possible it is best to check with the beneficiaries that they are happy with your choice of proposed trustees.

 Quite a lot of the trustee responsibilities closely resemble the duties of an executor.  So sometimes the same people get selected as both the executor and trustee. One of the primary differences of a trustee and executor is that the role of an executor can be over within twelve months whereas the trustee role usually goes on for many years.

To appoint trustees in your English or Welsh Last Will you must write their full names, their addresses and make it clear that you are appointing them as trustees.

Sometimes selected trustees might change their mind about being your trustee when the time comes.  This can happen for any reason; usually changes in their circumstances will have prompted this.  Perhaps their ill health, the ill health of a loved one or other family issue has taken precedence for them.  Other times, the people you chose as trustees may be enacting the role but some time down the line find their circumstances have changed so that they can no longer carry on doing the job.  Worse case is that they die before finishing the role.  Maybe they simply lose the will to keep going with the responsibility.  Whatever the reason is your trust loses a trustee; so make provision to name alternative trustees who will pick up from where the last person left off.  In England & Wales if you do not prepare a replacement trustee for a testamentary trust and your original choice fails to act or complete the trustee role to the end then the court appoints someone else to act as a trustee.  The exception to this is if an appointment for a replacement trustee is made by the existing trustee or trustees.  In England & Wales if the trust is an inter vivos trust then you have the legal right to appoint a replacement as and when needed.

 When you arrange a trustee within your English and Welsh Last Will and Testament and at some later point change your mind then you should make sure you agree with the proposed new trustee they are willing to be a trustee first before letting the existing proposed trustee know that there services will not be required.  Once they know there help will not be called upon they can then relax and cease to contemplate the future appointment.  Finally remember to change your Will or create a codicil which reflects this alteration.