The role of a trustee may be assigned to you from your closest friends or family. It comes with significant responsibilities and demands the highest standards of probity. The person selected should handle this role with honesty, integrity, and clear judgement.
What is a trustee?
A trustee is described broadly as an individual who holds property, authority, or a position of trust or responsibility for the benefit of another.
The most common form of trusteeship are for the benefit of children named in a will, but who are not yet old enough to make decisions for themselves. Managing a pension trust to benefit employees is also another common reason for a trustee.
Generally, a trustee is somebody who’s authorised to undertake certain tasks pertaining to financial management, but is not entitled to receive any income or benefits from the funds being managed.
What is a trustee: Requirements
The requirements of a trustee are clear-cut. To be a trustee of any sort you have to be at least 16 years old, in some cases 18. You must also be properly appointed according to the procedures outlined in the charity or trust’s governing document.
There are many factors which can deem you ineligible to become a trustee. If you have only one of the following then it is a criminal offence to become a trustee:
- If you have an unspent conviction for dishonesty or deception
- If you’re bankrupt or have entered into a formal arrangement with a creditor
- If you’ve been removed as a company director for wrongdoing
What is a trustee: Responsibilities
It’s the responsibility of all trustees to acquaint themselves with the important documents relating to the trust or charity, and familiarise themselves with the powers and duties conferred on them under the rules.
You’ll be taking on the legal ownership of the trust or charity, so you must ensure that it’s carrying out the purpose for which it was set up. That means you’ll need to plan the activities of the charity or trust and be able to justify your decisions afterwards.
1. Non-profit
As a trustee, you’re not allowed to profit personally from the funds under your control, and you cannot be paid for your time unless you’re undertaking the role professionally.
Certain expenses may be received if the work leaves you out of pocket, for example if you travel to distant meetings on behalf of the charity and need to claim the train fare.
2. Un-biased
Be aware of conflicts of interest and always avoid putting yourself in the position where your role as trustee is at odds with your personal interests or loyalties.
Generally you should seek to take decisions with the unanimous agreement of your fellow trustees, ensuring that you always work within the terms of the trust and the wider law.
3. Responsibility
Trustees must make sure the governing documents are strictly adhered to and that all reasonable steps are taken to find out about and understand their legal requirements. It’s prudent to keep full and accurate records of everything that happens, and manage resources responsibly without taking unnecessary risks.
Seeking professional advice
Whilst it’s your duty as a trustee to act only in the best interests of the beneficiary and you should seek to undertake the task of trustee in a personal capacity, it’s always acceptable to seek professional advice when it’s required. Indeed, you’d be failing in the task if you didn’t seek advice in certain situations.
If you’re the trustee of a will, or have any other significant financial responsibility, it is recommended to seek professional financial advice and support.
