The job of trustee is an onerous one, which makes choosing the right trustee extremely important.
The name of the arrangement - 'trust', provides a clear indication as to the most important emotion that the settlor must have with respect to the trustee.
The Role of Trustee
The settlor of a trust gives the legal ownership of the assets put into the trust to the trustee, who looks after those assets and applies them for the benefit of the beneficiaries. A trust is therefore an arrangement, not a legal entity.
What Qualities Does a Trustee Need to Demonstrate?
The trust that a settlor places in a trustee is extensive.
The settlor needs to be confident that:
- the trustee will ensure that the funds in the trust are invested wisely, having regard to the timing and amount of distributions to be made from the trust;
- the trustee will ensure that the investment policy will preserve the assets and in addition that the investments are in the best interests of both current and future beneficiaries;
- the trustee will administer the trust to meet both the terms of the law and the trust deed;
- the trustee will maintain good records in order to report to interested parties where appropriate, and also to ensure that they as trustee have the ability to make distributions in the most tax efficient manner possible.
What Skills Should a Trustee Demonstrate?
The trustee needs to possess:
- legal skills;
- accounting skills;
- investment skills;
- an understanding of the settlor's intention, as well as the needs, strengths and weaknesses of the beneficiaries;
- independence and objectivity.
The Value of Corporate Trustees
A corporate trustee can provide experience, objectivity and the complete spectrum of professional services required to deal with all aspects of the trust.
In using Dixcart to provide professional trustee services, the settlor and beneficiaries will also have peace of mind in the knowledge that their trustee is in a well-regulated jurisdiction with courts that have experience in dealing with trust matters.
The Dixcart Group has a number of fully regulated, independent trust companies in several different jurisdictions.
Private Trustee Companies and Professional Trustees
In the situation where a private trustee company is in place (PTC), the PTC would be well advised to engage a professional trustee such as Dixcart in order to ensure that it has advice on how to correctly administer the trust's activities and to ensure that it is acting in a manner which is compliant with both the law and the trust deed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.