Responsibilities of a Trustee

What are the responsibilities of a Trustee?

Trustees must comply with the various Trustee Acts. A trustee owes duties of honesty, integrity, loyalty, and good faith to the beneficiaries of the trust. They must act exclusively in the best interests of the trust and be actively involved in any decisions.

The general duties of trustees are:

• To observe the terms of the trust - Trustees must learn the terms of the trust and comply strictly with the duties and directions set out in the trust deed.

• To act impartially between beneficiaries - Trustees usually have a duty to ensure that one beneficiary shouldn't suffer at the expense of another. It's common for a trust deed to require that trustees balance potentially competing interests for income and capital.

• To provide information - Trustees must keep clear and accurate accounts for the trust. It can be helpful if trustees provide beneficiaries with relevant information or documents relating to the trust. However, trustees may wish to seek advice in this regard as there's no obligation to share all information and documents with the beneficiaries.

• To act unanimously - Trustees must act unanimously unless the trust deed says otherwise.

• To act carefully and distribute assets correctly – for example, in a life interest trust, the trustees must distribute any income to the life tenant beneficiaries but still preserve the value of the capital for any remaindermen. The  rights of beneficiaries will vary depending upon the specific wording of the trust deed, and trustees should take legal advice if they are unsure of their obligations.