A Will creates a testamentary trust and begins after the person who made the Will dies. Some or all of an inheritance is held in trust, rather than going directly to a beneficiary. The trustee manages the assets as per the provisions of the Will.
Selecting the right trustee is an important step in setting up the trust. The person may be in control of money or property for many years and the decision is one which needs careful thought. An NSW estate lawyer can help you decide who is suited to the role and make sure your Will gives the trustee clear powers.
What Does A Trustee Actually Do?
The trustee administers the assets held in the testamentary trust. They have to do what is best for the beneficiaries and follow the Will.
Depending on the language of the trust, the trustee may be required to invest money or to manage property. They may also be able to choose when to pay money to a beneficiary. Other duties may include record keeping and preparation of tax returns.
This isn’t just a ceremonial job. Trustees have legal obligations and can be held personally liable for any misuse of trust assets or failure to properly perform their duties.
Can The Executor Also Be The Trustee?
Yes. In many Wills, the same person is appointed as both executor and trustee. The jobs are different, even when one person performs both.
The executor deals with the deceased estate. This generally involves gathering assets and paying off debts before distributing the estate as outlined in the Will. If a testamentary trust is created in the Will, some of the assets may go into that trust. The trustee then manages these as set out in the terms of the trust.
Using the same person can make administration simpler. It is not always the best choice. Someone may be suitable for administering an estate but less suited to managing a trust for many years.
What Should You Look For In A Trustee?
A good trustee should be reliable and organised. The person should also be able to make sensible financial decisions without treating the trust assets as their own.
Family relationships are worth considering. A trustee may have to refuse a beneficiary’s request or decide how much money should be distributed. If there is already tension within the family, giving one relative control over another relative’s inheritance may cause more conflict.
Age and long-term availability should also be considered. Some testamentary trusts can continue for decades. Your chosen trustee should be reasonably likely to remain able to serve and willing to take on the work.
It can help to speak with the person before naming them. Someone who is surprised by the appointment after your death may decide they do not want to act.
Should You Appoint More Than One Trustee?
You can appoint more than one trustee. This can be useful if one person understands the family while another is more comfortable with financial administration. Joint trustees may also provide some oversight of each other.
There are possible disadvantages. Trustees may disagree, which can slow decisions or make administration harder. The Will should explain how the trust will continue if a trustee later dies or retires.
An NSW estate lawyer can also discuss whether a substitute trustee should be named in case your first choice cannot act.
When Might A Professional Trustee Be Suitable?
A professional trustee may be worth considering where the trust will continue for many years or where family conflict is likely. Professional administration can offer experience and independence.
Professional fees can reduce the funds available to beneficiaries. You will want to think about how much work is required, and what the trust will probably be worth, before you choose this option.
How Can JS Law Group Help You Choose A Trustee?
Your choice of trustee can make a huge difference in how smoothly your testamentary trust operates long after your Will takes effect. The person should be competent and reliable and should fully understand the responsibility involved.
JS Law Group can assist you in establishing a testamentary trust that fits your needs and selecting a suitable trustee structure. Speak with an NSW estate lawyer about your Will and estate plan. Reach out online or call JS Law Group on 02 9135 2939 to arrange a consultation.
