Since the introduction of the Trustee Act 2010 trustees have specific responsibilities concerning the investment, servicing and administration of trust funds. The duty of care applies both to professional and lay trustees, however higher standards are expected of professional trustees. There are a number of trustee responsibilities including:
Keeping Investments under Review
- The trustees must periodically review the Trust's investments against the standard investment criteria and consider if they should be varied.
- Delegating the management of trust investments to third party professionals does not absolve trustees of responsibility; an on-going duty to monitor the performance of the professional manager remains.
- In most cases when trustees are considering the exercise of a power of investment, or carrying out an investment review of the trust assets, they are required to take proper advice to ensure that account is taken of the standard investment criteria.
- Proper advice is defined as "the advice of a person who is reasonably believed by the trustee to be qualified to give by his ability in and practical experience of financial and other matters relating to the proposed investment."
Other duties for Trustees
- Ensure that investments are suitable
- Take into account the settlor's wishes
- Ensure fairness between beneficiaries
- Monitor investments and not "sit in" cash
- Take into account tax considerations
- To act honestly in all matters affecting the trust
- To exercise a degree of care, skill and diligence as an ordinary person prudent person
- To keep and render proper accounts
- To properly invest the trust funds
- To pay and transfer the trust property and the income thereof to the right persons
- Not to deal with the trust property for his own benefit, or otherwise to profit by the trust
- Not to do anything which would impede the performance and function of the trust