How to choose the right trustee to oversee your family’s wealth

Trusts can be indispensable as part of your financial plan, offering you a method of securely setting aside wealth for various reasons.

You may have read our previous blog about the value of trusts, detailing the benefits they can offer, such as:

• Ringfencing your wealth for your chosen beneficiaries
• Potentially reducing Income Tax, Capital Gains Tax, and Inheritance Tax on your wealth
• The range of different kinds to suit your specific needs.

There are various elements to consider when setting up a trust. From picking the right type of trust, to how and when you want your beneficiaries to be able to access your wealth, you’ll need to make some key decisions.

But arguably, the most important of all of these is selecting your trustee. This is the person who will be responsible for overseeing the trust, and potentially even giving your beneficiaries access to the wealth contained within it.

As the settlor of the trust, you can be the trustee and manage these responsibilities yourself. However, there may be circumstances in which you might want to appoint additional trustees to this role.

For example, if you were setting money aside for your grandchildren until they reach adulthood, you might want to appoint another trustee just in case you pass away before you can give them access to the funds.

As a result, it’s important to pick the right person for the job. So, read about a few factors to consider to help you choose the right trustee.

Choosing someone who will do right by your family

First and foremost, you may want to consider a trustee who you are confident will always do right by your family.

Your trust may contain a substantial amount of wealth that you’ve deliberately put aside for your family. So, it’s key to choose a trustee who will act appropriately and prudently with your family in mind when making decisions about the trust.

To ensure that this happens, you might choose a close friend or even a family member for the role. These individuals might be more likely to understand your needs, and you may feel that they’re best placed to act in your family’s interests.

If your beneficiaries are your children, you may also want to consider choosing a trustee who can act as a guide and mentor.

For example, if you’re setting aside money for younger children in a bare trust that they’ll be able to access from age 18 (or 16 in Scotland), you might want your trustee to offer guidance as to how to manage the wealth your child will have access to.

Your trustee must be able to cope with some complex responsibilities

Trusts are conceptually quite straightforward: you set money or assets aside for your beneficiary, within a legal framework that’s overseen by the trustee.

However, even though they are simple to understand, your trustee will still have to contend with some fairly complex responsibilities.

For example, your trustee may have to:

• Oversee and understand the trust, knowing who the beneficiaries are, what they’re entitled to, and when
• Keep accurate records of the trust, from bank statements to expense receipts
• Handle the trust’s tax position, and settle any fines or penalties that arise if this is mismanaged
• Give your beneficiaries access to what you’ve set aside, at the right time and in the correct proportion. They will also need to finalise and close the trust, if applicable.

These responsibilities can be complicated, so it’s important that you choose a trustee who you’re confident will be able to manage this.

You can employ an expert to entirely oversee the trust, or even assist your preferred trustee

If you’re concerned that the responsibilities of being a trustee are too complex for anyone you know personally, you could consider giving the task to an expert.

Whether this is a solicitor, accountant, or other professional, you might prefer the peace of mind that comes with choosing an expert to oversee the trust and manage these difficult duties using their years of experience.

While this may come with a cost, you might feel that this is more appropriate, especially as it involves making decisions about your family’s financial future.

Of course, you could even employ an expert alongside your preferred trustee. This solution can offer the best of both worlds, meaning you can choose someone who understands and appreciates what’s best for your family, while also having the reassurance that there’s an expert on hand to assist as and when necessary.

Need help? Get in touch

If you’d like to find out more about how trust planning could help secure your wealth for your family’s future, please do contact us at Britannic Place.

Email info@britannicplace.co.uk or call 01905 419890 to speak to us today.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.