Top tips for appointing a trustee

Deciding who you can trust with your money and your loved one’s future can be a difficult decision. Luckily, trusts lawyer Andrew Spearman is on hand to provide some handy tips on how to choose who should be your trustee.

1. Make sure you understand the role of a trustee

Before making a decision, you must understand what being a trustee entails, as this will help you find the best people for the job.

People set up trusts for many reasons, including to provide an inheritance for a child in the future, to hold pension savings or to protect assets against other living costs, for example, care fees. We can help you to understand what type of trust will best suit your financial aims and can guide you through creating, registering, and managing it.

You will also need to nominate an individual to look after the trust. A trustee has to safeguard the money and act in the best interests of your beneficiary until the trust is passed on. We can explain these responsibilities to you.

2. Choose individuals you can trust and rely on

Though this may sound like common sense, it’s important to ask yourself some questions before picking a trustee. It’s usually best to nominate two, perhaps even three, people to take care of a trust. This way, they can share the responsibility and make impartial joint decisions.

Consider if these individuals are responsible, if you trust them with your personal affairs and if they have good judgement. These are vital characteristics a trustee needs if they are to make rational decisions.

3. Elect someone that knows your family and the beneficiary

Most people will nominate a relative or close family friend to act as their trustee. This is because they understand your family dynamics and personal situation. They also know you and can use this insight to decide how you would want the money to be handled and how it should be spent to benefit your beneficiary.

If you are setting up a trust to provide an income for a vulnerable family member, for example, a child or relative that suffers from learning difficulties, it’s also good to know that your trustees understand this and possess knowledge of their condition. This can help ensure they will use the money to pay for the care and support that your loved one needs.

4. Pick a trustee that’s financially aware and good with money

A trustee doesn’t have to be a financial wizard, however, it helps if they possess some prior knowledge of investments. They should also be competent in handling money and have their affairs in order. This will ensure that they can handle the fiscal responsibility that comes with being a trustee.

Knowing a little about how investments work will also make the role of a trustee seem less daunting and can help them better protect your assets.

It’s often a good idea to sit down with your potential nominees first, before making any final decisions. You can explain what the role entails and they can decide if they want to take on the task.

5. You could consider appointing a professional trustee

We often act as independent professional trustees for our clients, taking care of a range of portfolios from personal trusts with only one asset to large and complex property and investment trusts.
People often choose a professional trustee as they act objectively, intimately understand the legal process, and have years of experience creating and managing trusts. This can help to avoid conflict within families, and ensure the trust is handled correctly, so beneficiaries face no issues in the future.

Our professional trustees spend time getting to know you, your family and building rapport, so we understand exactly how you wish us to act. We’re passionate and committed to doing all we can to protect your interests and your family’s future.

You could decide to a make a family member one of the trustees and appoint a professional as the other. This way there is someone that knows and understands your family involved with the decisions, as well as a specialist that understands how trusts work, and exactly what steps need to be taken.

To find out more about creating or administering a trust or appointing a professional trustee, contact Andrew Spearman in our dedicated trusts team.