When a Will is drafted, it sometimes appoints Trustees as well as Executors. The role of Executor is to administer the deceased’s Estate, but the Trustees are there to manage any ongoing Trusts which arise from the Will.
A Trustee (or Trustees) may be appointed if a beneficiary is under the age of 18, in which case the Trustee will be responsible for taking care of their inheritance until they come of age. Alternatively, Trustees may be appointed to manage a Trust that has been set up as part of a Will and holds some (or all) of the Estate. The Trust would need to be managed in line with the terms that have been set out in the Will.
It’s common for the same person (or people) to be appointed as both Trustee and Executor, but not everyone fully understands why a Trustee is named in a Will or what the role entails. Below I explain why a Trustee might be appointed in a Will, and also how the Trustee works with the Executor.
What Does an Executor Do?
A Will should set out who is going to be the Executor of the Estate. This can be more than one person and, in fact, up to four people can act together in this role at any one time. The Executor is the person who is appointed to be legally responsible, after a person’s death, to administer their Estate and carry out the terms of your Will.
Administering an Estate is a very broad role which carries a significant amount of responsibility and potentially some liability. The person who acts as the Executor of your Estate will need to notify organisations that you’ve died, like your bank or building society, your pension provider etc. They’ll also need to value all your assets and liabilities and potentially prepare accounts to HM Revenue & Customs in case any Inheritance Tax is payable and then arrange to pay any tax from the Estate assets. They might also need to apply for a Grant of Probate. They must also pay off all other debts you have, again from the Estate assets, defend any challenges to the Will and then distribute what’s left to the beneficiaries named in your Will.
The Executor should then ultimately receive a receipt from each beneficiary confirming that they have received payment of the amount due to them from the Estate and that the Executor is now discharged from their duty to administer the Estate.
What Does a Trustee Do?
If a Trust is established under the Will then the Trustees (who have been named in the will) become responsible for receiving the inheritance on behalf of the Trust. The Executor will need to distribute this portion of the Estate to the named Trustees, who are then legally responsible for managing this cash or assets on behalf of the beneficiary or on behalf of the Trust. The Trustees will need to carry out their role in accordance with the terms set out in the Will.
Trustees have a duty to act in accordance with the terms of the Trusts and to act fairly towards the beneficiaries, balancing each of their interests. There is also a statutory duty of care under the Trustee Act 2000 to “exercise such care and skill as is reasonable in the circumstances”.
Choosing the Right Trustee
Like the role of Executor, the role of Trustee is not something that should be entered into lightly. If Trustees need to be appointed in your Will then you should take time to carefully consider who would be the best fit for this role. Take into account the duties that will need to be carried out by whoever is appointed as Trustee and the responsibility that this role commands.
If a Trust is likely to be established in your Will then it’s always best to name at least two Trustees. This serves two key purposes, firstly it’s possible that any person you name as a Trustee may become unable or unwilling to act on your behalf when the time comes. So having two people appointed reduces the chances of this happening to everyone named. The second reason is a legal one because if the Trust contains property as an “Asset of the Trust”, then there is a legal requirement that at least two Trustees act to deal with the legal ownership of the property.
In the event that you only have one Trustee in place at the time of your death, then that Trustee can appoint a Co-Trustee to act alongside them to bring the number up to two. However, most people would prefer to choose their Trustees at the outset rather than relying on the sole Trustee to make the choice.
When making a Will it’s important to consider the role of Trustees. It’s also important to consider whether it is possible that a Trust could arise, based on your circumstances and how you would like your Will to be drafted. For more information please see Trust Wills.