What should a trustee meeting look like?

Trustee meeting

When you become a trustee, you become one of the decision-makers for a trust, and one of those responsible for its beneficiaries and their needs. As most key decisions will be made at a trustee meeting, it makes sense to document the decisions you and your fellow trustees make throughout the lifetime of the trust. This is most easily done by taking minutes at trustees’ meetings. However they can also take the form of resolutions or deeds; or for distribution of funds, tax forms.

Who should attend a trustee meeting?

In addition to trustees, your attendees might include some of the following:

  • Professional advisors, who might deal with taxation or legal matters
  • Investment or financial advisors
  • Beneficiaries or their representatives

Do all trustees need to attend in person?

Ideally, yes, because the trustees usually need to make their decisions unanimously.

If it’s not possible to get people together in the same room, you can use a conference call, Skype or similar. The main thing is that you can confer with each other, and stick to your appointed duties.

If a trustee cannot attend, even by phone, you can send them details of the discussions so they can consider what was said, and approve, reject or amend as they see fit.

How often should we meet?

It’s useful to meet once a year, but depending on the trust’s requirements, more frequent meetings may be required. If you are a trustee of a ‘dormant’ trust, you will probably need to meet less often.

What should go on the agenda?

You and the other trustees will need to cover a number of key items most times you meet.

You need to review the nature of the trust assets, and ensure that you are complying with any changes in legislation or tax. Most importantly, you must to consider the beneficiaries’ needs, and assess how the trust might assist them, or whether it’s best to retain funds for future use. An agenda might look like this:

  1. Review of the Trust Deed/Letter of Wishes: Familiarise yourself with the original trust instrument. Check what your powers and restrictions are, who the beneficiaries are, and what the trust is intended to do. If there is a letter or statement of wishes, this will provide further guidance.
  2. Review the tax treatment of the trust: What are the rates of income tax, capital gains tax and inheritance tax, and what are the reporting measures? Are there any changes that you should be aware of?
  3. Apologies: Who is attending and who sends their apologies?
  4. Matters arising: Were there any matters arising at the last meeting which have either been addressed or continue to remain outstanding? (This is to ensure nothing is missed between meetings)
  5. Beneficiaries and their needs: Who are the beneficiaries of the trust, and what are their entitlements? Is it appropriate to distribute funds to them? Are any potential beneficiaries nearing their age of entitlement? Are there any vulnerable beneficiaries?
  6. Asset performance: 
    • Are the assets within the trust suitable, given the trust’s objectives, and is the level of risk appropriate?
    • Where there are investments, have they fared well enough compared to the benchmark the trustees have set?
    • If the investments are managed on a discretionary basis, has the investment manager been given an Investment Policy Statement (an obligation of the Trustee Act 2000)?
    • Where there is property, is it insured, is it properly maintained, and are rental agreements fit for purpose?
    • Where there are loans, are the interest rates still appropriate?
    • Have the borrowers acknowledged the loan and made the required repayments, or should the loan be called back in?
  7. Accounts: You’ll need to review and approve the accounts for the tax year. Assess the amount of capital and income, and ensure all interests are being managed accordingly
  8. Tax/compliance: Sign off the trust tax return, record key dates for payments and deadlines, provide tax certificates to the beneficiaries for income entitlement, and see if you can make use of any tax allowances or reliefs. Assess the position for income tax, capital gains tax and inheritance tax, and see if any measures can be taken to reduce future tax burdens. Complete self-declarations for the Common Reporting Standard (CRS), if necessary, the Foreign Account Trust Compliance Act (FATCA), report to the US Internal Revenue Service (IRS), and update the HMRC’s Trust Register and if necessary, register for a Legal Entity Identifier (LEI) number to continue investment trading. If all this is sounds very technical, some brokers or trust administrators will do this for you.
  9. Key dates/planning: Discuss any event dates on the horizon that will affect the trust, and plan accordingly
  10. Approval of agents: Decide whether you are happy to continue with your current agents, professional advisors, and investment advisors
  11. Any other business: The trustees, advisors and beneficiaries have the opportunity to raise anything relevant that has not been already covered

Do we have to take minutes?

Although it is not a formal requirement, taking minutes is administrative good practice. It could also be very useful if the trustees are ever subject to legal proceedings, for example, from a disgruntled beneficiary, as they would provide evidence that the trustees were performing their duties and considering all beneficiaries when reviewing the trust arrangements.

What should the minutes of the meeting look like?

The minutes needn’t be a burden. They could follow the running order of your agenda, and be updated each year to reflect any change of circumstances.

Cheryl Farnham TEP is a Director of Arcadia Legal & Trust in Somerset, UK