Managing a Trust

As a trustee you are responsible for managing the trust as well as being the legal owner of the assets. It is your responsibility to put the interests of the beneficiaries above your own at all times in the management of the trust.

There are many duties and these can be daunting and overwhelming as well as taking considerable time, especially when you run into any complications.

A trustee has a fiduciary position – you must never put your interests above those of the trust and you must not act in a way that puts your own interests in conflict with those of the trust, even if you do not actually benefit.

To manage the trust, you (or a solicitor appointed) will need to:

• administer the trust according to the trust deed
• invest and manage the assets – including the sale of any assets
• depending on the assets appoint and oversee investment advisors
• process payments or other distributions to the beneficiaries from the trust fund
• keep detailed records including regular accounting for trust assets and income
• manage tax affairs – including the preparation of annual trust accounts, filing tax returns and trustees’ tax deduction certificates
• make any required inheritance tax returns
• deal with capital gains tax
• attend trustees’ meetings
• comply with many laws affecting trustees and management of trusts

As you can see, there are a number of tasks involved in managing a trust, many of which have their own complexities such as Tax. If you would like to know more about how we can help then please ring us on 01273 604 123, email us at enquire@bbc-law.co.uk or fill in our enquiry form.

As a trustee, you are responsible for managing the tax affairs of the trust. This includes registering the trust and maintaining the Trust Registration Scheme record with HMRC, completing annual tax returns and paying both Income Tax and Capital Gains Tax as required, which can be a formidable task.

Depending on the type of trust you may also have to make returns for Inheritance tax annually and 10 yearly. For many trusts it is then also your responsibility to provide beneficiaries with a statement about the amount of income and tax paid by the trust.

We can deal with all trust tax returns, without the need for costly external accountants. We provide completion and submission of trust tax returns as part of your trust management service.

If you already have a solicitor managing your trust – this is often the solicitors who set-up the trust – then you need to know that they are still managing the trust effectively.

Your solicitor is responsible for ensuring that the wishes of the settlor are met and that the beneficiaries are being provided for in accordance with the terms of the trust. Like with most things, it’s all too easy to think ‘out of sight out of mind’ and not consider if the solicitor is doing a good job. This is especially the case if the solicitor’s administration/management fees are covered.

When it comes to Trusts you need to be sure that the solicitor genuinely cares about making the Trust work for everyone and are proactive in the management of it. If you are a trustees then it is your legal duty to ensure the trust is being properly managed and you will be liable if the trust is not being managed properly.

Trusts are flexible and can be often tailored to meet the changing needs of beneficiaries. This is where a proactive solicitor that has taken the time to get to know you personally will be able to offer solutions. For example, if the Trust was set up for teenagers that have since become adults with children of their own then their needs will have changed and this needs to be reflected.

Some solicitor trust management charges are expensive and not all solicitors will charge the same.

Our trust management expertise over many years and our long involvement with family trusts means that we have the experience and systems to ensure value for money as well as a prompt responsive caring service.

It is good for your own peace of mind to know that the solicitor managing the trust is doing so effectively. In some cases, you may find that the solicitor is falling short.

The following are some of the warning signs that indicate your solicitor may not be proactively managing the trust and getting the most out of it for all involved:

• Slow accounts at the end of year – as a trustee you need the end of year accounts in a reasonable period
• Slow to respond to enquiries – trustees and beneficiaries may have numerous questions and require information. Your solicitor should be quick to respond and provide all required information, taking time to confirm your understanding.
• Lack of Planning and Strategy in the trust – as a trustee you want to be aware of investment matching, proactive tax solutions and know that the needs of the family are being met.
• Slow to explain how any changes in Law and compliance changes are impacting the Trust and failing to then provide quick solutions
• No system for reviewing the trust – trustees can’t operate in a vacuum and your solicitor should be actively contacting you to ensure the Trust is still serving its purpose.
• Slow to respond to any challenges from beneficiaries or any deaths/retirements
• No Paperwork trail – the solicitor should have all account details, meeting notes, and correspondence filed away safely and readily accessible should you need it

Making the Switch

If you feel that your solicitor is not doing all they can to ensure the trust is performing well then you can switch. It’s important to remember that the solicitor managing the Trust doesn’t have to be the same solicitor as set it up.

At the heart of any Trust is the need to pass on the maximum benefits to the next generation. In order to do this, we feel that it is necessary to have a genuine relationship with the trustees to fully understand the beneficiaries’ personal circumstances. Our expert Trust solicitor David Edwards will take the time to understand your needs as well as those of the beneficiaries and how these can change over time. We ask the right questions at the right time in a way that works for you.

We also have a series of tried and tested processes in place so that you know the Trust is in safe hands. If you have some investments with stockbrokers as part of the Trust, then we can manage this process too.

Proactive advice – we are quick to adapt to a change in family circumstances as well as changes in the tax system.

Personal service – we take the time to understand the needs and objectives of the settlor, the trustees and the beneficiaries and their interests as you present them.

Which means…

• We enable you to exercise as much choice and control as you want over the Trust
• We provide a safe pair of hands – with years of experience, we know what we are doing
• We assist trustees in setting up Trust Accounts and Trust Tax Returns – ensuring that the trust is tax compliant in a range of different jurisdictions and circumstances
• We ensure that Trustees act only according to the terms of the deed
• We provide innovative and tailored solutions
• We handle disputes between beneficiaries and trustees
• We understand about tax and how to approach Trusts from a tax perspective offering strategic advice on the tax consequences of Trusts
• We deal with the appointment and retirement of Trustees for you
• We ensure the right investment advice is obtained
• We provide annual trust accounts
• We can deal with all trust tax returns
• We can advise on all the trustee powers and trust provisions

If you would like to know more about our Trust Management Service or you have a question about an existing trust or would like to create a trust then please telephone us on 01273 604 123, email us at enquire@bbc-law.co.uk or fill in our enquiry form. We will be happy to help and look forward to speaking with you.