Estate Planning – Residential CareSeptember 18, 2013
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Are you a trustee, or have you been asked to become a trustee, of a trust or will? Before you leap into the role with vim and vigour, we suggest that you consider a couple of things first.
The position of trustee is an important one and creates a special relationship of trust between the trustee and the beneficiaries of the trust or will. We call this a “fiduciary” relationship. It is a trustee’s duty, to always act in the best interests of all of the beneficiaries of the trust or will. A trustee must always act honestly and with a level of care and skill that would be expected of a reasonable businessperson in administering the affairs of others.
As a trustee, it is important that you are thoroughly familiar with the terms of the trust deed or will: with the assets held by the trust or estate; and with who the beneficiaries are or may be.
Trustees must also meet ongoing administrative obligations. These include the requirement to:
- Meet regularly in order to make decisions on how to deal with the trust fund (usually all decisions made by the trustees must be unanimous). It is also important that the trustees’ enter into resolutions recording their decisions and the reasons for those decisions.
- Ensure that proper accounts are prepared annually for the trust where the trust generates an income, and to file separate income tax returns for the trust.
- Keep detailed and accurate records of the trust, such as copies of correspondence and contracts with third parties, capital and income accounts; cash books; a detailed list of trust property; and relevant details of the trust, such as the date of settlement, contact details of the beneficiaries and any indemnities or guarantees that have been entered into by the trust.
If you have any questions about your current or future role as a trustee of a trust or will, please contact us and we would be happy to talk them through with you.