TRUSTEES
We are commonly asked how many trustees should be appointed as well as just who it is appropriate to appoint . Today we hope to address this .
How many ?
How many trustees are required differs depending on whether the trust holds land .
Where a trust holds land , no matter what type of trust , a minimum of two trustees or a trust corporation are required . This is because at least two trustees are needed to give valid receipt for capital monies arising under a trust ( e . g . sale proceeds ).
Where the trust holds land there may be a maximum of four trustees . If more than four are named then only the first four may act .
Where a trust does not hold land there is no restriction on the number of trustees . That said , it is still advisable to have between two and four trustees so that the trust may later acquire land . It is also best to avoid having a sole trustee to avoid delays in administration if the sole trustee dies or becomes unable to act .
Who ?
Trustees should be people who the settlor or testator quite literally trusts , be this a professional , a family member or a close family friend . After all , they are being trusted to hold their assets and look after the best interests of the beneficiaries .
Every case will be different so there is no hard and fast rule for who should be appointed as a trustee . Who is appropriate may depend on the size and complexity of the trust . It may be perfectly fine to appoint a couple of family members to look after a small family trust for the benefit of the testator ’ s children , but less appropriate to appoint them to administer a complicated and valuable Flexible Life Interest Trust or a trust of the testator ’ s business . In the latter cases trustees with specialist knowledge may be required so it may be more appropriate to appoint a professional trustee ; either to act alone or with family members .
Another question we commonly encounter is whether it is acceptable for a trustee to be a beneficiary of a trust . While it is perfectly possible you ought to consider the potential conflicts of interest this may cause . Again , this will vary by case . Potential problems can arise in cases where a balance is not struck or both sides of a family are not represented in a family trust . In many cases it will be fine for the surviving spouse and one of the adult children to act as trustees and be beneficiaries ; less so where there is a ‘ blended family ’ and there ’ s a risk of conflict between them – remember , the trustees must act unanimously unless the trust deed includes an express power to act by majority .
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The Society of Will Writers