Avoiding trust disputes

Trust disputes: Acting as a trustee is often an altruistic endeavour, however if a trustee does not properly discharge their duties, they can find themselves in hot water.

By Ben Wilson, a ssociate – contentious trusts and probate, Forbes Solicitors

There are numerous duties that a trustee needs to be fully aware of in order to avoid potential issues.

Firstly, trustees are not entitled to be paid for their time unless allowed by either statute or the written trust deed.

Secondly, trustees need to control the trust property and be aware of the nature, circumstances and terms of the trust.

Once up to speed, they must inform beneficiaries of their position, supplying them with required information.

Acting impartially and maintaining the appropriate standard of care in the management of the trust and exercise of discretions will help in avoiding trust disputes. Trustees should disclose circumstances which might cause them to exercise powers improperly and obey the lawful terms of the trust deed.

Trustee duties also include only investing in authorised investments, not entering into personal transactions with trust property, paying the right persons and being ready to produce accounts.

Finally, a trustee, when exercising their powers, act: a. Within those powers; b. Honestly; c. In the interests of beneficiaries; d. Without delegation, except as permitted. There can be serious liabilities if any loss is caused to the beneficiaries from the breach of duties. As such, the role of a trustee can be onerous and should not be entered into without proper consideration of the extent, obligations and responsibilities of the trust.