A trustee holds money or property for the benefit of someone else, the beneficiary. In a will, your executors are usually also the trustees of any gifts that are not handed over straight away, such as a share held for a child until they grow up.
What duties does a trustee have?
Trustees must act in the best interests of the beneficiaries, and must not use their position for their own benefit. This is often called their fiduciary duty. They must also use reasonable care and skill, and a professional is held to a higher standard (Trustee Act 2000, s.1).
A trustee who breaches their duties can be personally liable for the loss, although a court can excuse a trustee who acted honestly and reasonably (Trustee Act 1925, s.61).
Can a trustee be paid?
A family member acting as trustee is not usually paid, but can be repaid expenses properly incurred (Trustee Act 2000, s.31). A professional trustee can charge if the will includes a charging clause (s.28), and a trust corporation is entitled to reasonable pay even without one (s.29).
What is a trust corporation?
A trust corporation is a company that meets the conditions the law sets for acting as a trustee in its own right (Trustee Act 1925, s.68(18)). Digilegal Trustees is a trust corporation.
Why does that matter?
- It can act alone. Where a trust holds land, sale money must normally be paid to at least two trustees, but a trust corporation can give a valid receipt on its own (Trustee Act 1925, s.14).
- It can hold and distribute funds. Digilegal Trustees can hold the estate's money and pay each beneficiary.
- It does not die or lose capacity. A company can keep acting for as long as a trust lasts, which matters when a trust runs until a child turns 18 or older.
Find out more
See how Digilegal Trustees acts as executor and trustee for a fixed fee.