I’ve been appointed as a trustee. What do I need to do?

man looks thoughtful

Have you been asked to take on a trustee (or executor) role for someone’s will? If so, did you understand what the role entailed, or take advice before accepting?

It’s all too common for people to agree to say yes without finding out what’s involved. Taking on an executor /trusteeship is not to be done lightly and you should take proper advice, especially if you are unfamiliar with estate and trust management.

First steps

If you’re a new trustee, you should establish the nature and extent of the trust asset(s), as this will also determine the nature of your responsibilities. For example, if it is a share in a property, is there insurance in place? Who is responsible for this and for other outgoings? Do you and the other trustees have access to the property so you can inspect it?

If the asset creates an income, have you registered the trust with HMRC and submitted regular income tax returns? Trusts do not have an allowance similar to personal income tax; but instead there is a trustee rate of income tax associated with a discretionary trust or other ‘relevant property regime’ trust. It’s worth speaking to a qualified practitioner to fully understand this and other issues.

If you fail to register with HMRC or pay income tax, you may incur penalties, so it’s better to do this at the outset. I know of one case where a man who was co-executor of his late wife’s estate, which included a nil-rate band trust and an IOU to the trust, had not registered the trust even after ten years! A very late filing to HMRC was required, and the family had to seek advice for what had become a messy and tax-inefficient situation.

Seek advice

If you’re appointed trustee, seek advice, and soon, as there are real responsibilities to fulfil both at the outset and going forward.

What about choosing trustees/executors for my own will?

If you’re making your own will and need to choose trustees/executors, you’ll need to consider whether they will agree, whether they can work well with any other named person(s), and if they are suitable for the position.

Pippa Bavington TEP is an Associate Solicitor Private Client with Giles Wilson in Leigh on Sea, Essex 

Disclaimer

An article of this kind can never provide a complete guide to the law in these areas, which may be subject to change from time to time. The opinions and suggestions made within this article should not be interpreted as specific advice in relation to any particular individual or individuals. Neither STEP, the article author or their firm accept responsibility for any loss occasioned by someone acting or refraining to act on the basis of the opinions and suggestions contained in this article. More