Trustees have certain legal obligations that they must fulfil whilst acting as a trustee of a trust, be it a trust created in your lifetime which is to take immediate effect (often referred to as a “lifetime settlement”) or a trust created on death through a Will (known as a “Will Trust”). If these obligations are not properly fulfilled then trustees can face legal ramifications and the trust can be attacked by Her Majesty’s Revenue and Customs (HMRC).
Trustees are under a legal obligation to “exercise such care and skill as is reasonable in the circumstances”.
Any new trusts must be reported to HMRC for one or more of income tax, capital gains tax and inheritance tax purposes.
Warners can be named as trustees of both lifetime settlements and Will trusts. Warners have the expertise needed to administer the trust correctly and deal with any property, tax or trust law issues that arise during the lifetime of the trust. Naming Warners can be particularly helpful where there are no friends or family members who you want to act or where there are potential conflicts between the beneficiaries of the trust.
- Trustees’ Responsibilities – Be Careful Traditionally, trustees used to regard their responsibilities as being almost exclusively the safeguarding of the assets of the trust. However, the Trustee Act 2000 raised the bar somewhat and it is clear that many...