Trustees
Open a trustee bank account
Setting up Trustee Bank Accounts is a tricky and time consuming business. Type right here on the page.
If you are a solicitor you are aware of this and this service can help you set the account up quickly and efficiently. The set up fee is only £400 + VAT. Solicitors find out more HERE
Most Trustee are not specialist solicitors and this service is available to any Trustee who requires a Trustee Bank Account to be open. This service aims to make it easy and stress free for Trustees.
We’re here to help.
What is a Trustee Bank Account?
A trustee bank account is a specialised account in which a trustee oversees funds for the benefit of a third party, referred to as a beneficiary. The money is held in accordance with the stipulations of a legal agreement, such as a will or a trust deed, which specifies how
and when the funds may be accessed. Trustees bear a legal obligation to manage the funds in line with these stipulations, which frequently limit access to the funds until certain conditions are fulfilled, such as the beneficiary attaining a specific age.
How it operates
Trustees: These are individuals or organizations appointed to oversee the funds. They are tasked with managing the account in accordance with the trust’s regulations.
Beneficiaries: This term refers to the individual or individuals for whom the funds are held. They are the final recipients of the money, but they cannot access it directly until the stipulated conditions are satisfied.
Trust Deed: This is the legal document that delineates the rules of the trust, including the
identities of the trustees and beneficiaries, as well as the timing and manner in which the funds can be utilized.
Management: The trustee is responsible for opening and managing the account in the name of the trust. They oversee all transactions, which must adhere to the trust deed.
Restricted Access: Access to the funds is confined to the trustee and is regulated by the trust deed. For instance, a trust established for a child may prohibit access until the child reaches the age of 18.
Common applications
Providing for minors: A parent or family member may establish a trust for a child to ensure funding for their education or future needs.
Managing assets posthumously: A will may stipulate that funds be held in a trust to be managed on behalf of a beneficiary.
Supporting adults with disabilities: A trust can be utilized to manage funds for an adult who is unable to handle their own financial affairs.
Protecting funds: A trust account can be employed to manage compensation funds while ensuring that they are not spent in a manner that would adversely impact the recipient’s eligibility for government assistance.
Setting up Trustee Bank Accounts is a tricky and time
consuming business.
If you are a solicitor you are aware of this and this service can help you set the account up
quickly and efficiently. The set up fee is only £400 + VAT.
Trustee Duties
If you are appointed as trustee of a new trust, you will most likely have to set up a trustee bank account to perform your duties.
If you are already a trustee of an existing trust or charity, you will already have a bank account – but how competitive are the account charges and interest rates compared to other products on the market now?
The responsibility as a trustee varies from trust to trust. In some instances, it may require daily financial management or the use of a trustee investment account. In others, it will function basically as a savings account, with very little active management required. As a trustee, it is essential to understand the financial needs of the beneficiaries. For instance, you might be designated to a trust in which the beneficiary is a charitable organisation, and the stipulations involve capital appreciation.
You may have become the Trustee through a Will and have a responsibility to beneficiaries who may be minors or have needs and support. Regardless of your particular duties, it is essential to understand the range and nature of the investments available to you. This range is outlined in the Trust Deed and will impose very limited investment options, such as solely bank and building society deposit accounts. Nevertheless, it may be advantageous to consider including unit trust shares, life assurance investment bonds, and other assets.
For more information on reviewing Trust assets other than cash please click here.
A trustee’s primary responsibilities include enacting in the best interests of the beneficiaries, adhering to the terms of the trust, and managing the trust’s assets with integrity, honesty, and due diligence. This encompasses protecting trust property, maintaining precise records, and making decisions fairly and in good faith.
Core responsibilities
- Act in the beneficiaries’ best interests: This is the foremost duty of the trustee. You must place the needs of the beneficiaries above your own and remain steadfastly loyal to them.
- Follow the trust’s terms: You are required to operate in accordance with the specific directives and stipulations set forth in the trust deed or will.
- Exercise reasonable care: Manage the trust with prudence and diligence, making informed decisions and seeking professional advice when necessary.
- Act impartially: You must ensure that all beneficiaries are treated equitably, guaranteeing that each receives their rightful share and is not placed at a disadvantage.
- Keep accurate records: It is essential to maintain comprehensive and accurate accounts of all trust-related activities, including income, expenses, and distributions, and to provide these records to beneficiaries upon request.
Important considerations
- Unanimity: Unless specified otherwise in the trust document, all trustees must reach a consensus on decisions. You are not permitted to delegate fundamental decisions regarding distributions or the appointment of a new trustee.
- Conflict of interest: You must avoid any actions that could lead to a conflict between your personal interests and your obligations to the trust beneficiaries. Additionally, you are prohibited from profiting from the trust.
- Duty of disclosure: You are obligated to share information with the beneficiaries so they can enforce the trust and hold you accountable.
TRS
The Trust Registration Service (TRS) was introduced in 2017 with the aim of providing trustees and personal representatives with a simpler means to comply with HMRC’s disclosure and registration obligations. In practice, complying with the TRS can create an additional administrative burden, and those affected should be aware of the requirements.
As a general rule, all trusts are required to register, with the main exceptions being charitable and life insurance trusts. That means all taxable, and since an addition to the rules in 2022, some non-taxable trusts are obliged to register.
Will Trusts, which are trusts established according to the stipulations set forth in a Will, are required to register after a two-year period following the death of the testator, provided that the Will Trust remains active. This situation is becoming increasingly common due to the
extended duration required to secure the Grant of Probate from the Probate Registry and the time necessary to manage estates. There may be instances where the Will Trust must register before the completion of the two-year period if: assets are allocated, meaning they are transferred to the Will Trust from the estate; and/or it receives additional property from outside the estate. In such cases, the Will Trust is obligated to register within 90 days of the occurrence of the event. Failure to register may result in penalties that can reach up to £5,000 for each offence.