For urgent advice on a court matter, please contact our 24 hour helpline on 0845 603 5067.
help@randa-fa.co.uk
Tel: 01324 622888

The Role of Trustees in Scotland

The Role of Trustees in Scotland: Duties and Responsibilities

In Scotland, trustees play a vital role in managing assets and ensuring the wishes of individuals, known as trustors or settlers, are carried out effectively. Whether it’s overseeing finances, property, or investments, trustees have important duties and responsibilities. Let’s delve into what these entail.

Fiduciary Duty

First and foremost, trustees owe a fiduciary duty to the beneficiaries of the trust. This means they must act in the best interests of those beneficiaries at all times. They must exercise their powers honestly, diligently, and with skill and care.

Compliance with the Trust Deed

Trustees are bound by the terms of the trust deed, which is the legal document outlining the settlor’s wishes and the instructions for managing the trust. It’s crucial for trustees to fully understand and abide by these terms to ensure they’re fulfilling their duties correctly.

Prudent Management

Trustees are responsible for managing the trust assets prudently. This involves making sensible investment decisions, considering factors like risk, return, and diversification. They must also ensure that trust assets are properly maintained and, where necessary, insured.

Avoiding Conflicts of Interest

Trustees must avoid any conflicts of interest that may arise between their duties as trustees and their personal interests. This includes situations where trustees may benefit personally from decisions made regarding the trust. Transparency and integrity are key.

Duty of Care

Trustees have a duty of care towards the beneficiaries, which means they must act with reasonable skill and diligence. This includes keeping accurate records, providing beneficiaries with relevant information about the trust, and seeking professional advice when needed.

Communication with Beneficiaries

Open communication with beneficiaries is essential. Trustees should keep beneficiaries informed about the trust’s administration, including any significant decisions or changes. This helps build trust and ensures transparency in the management of the trust.

Accounting and Reporting

Trustees are responsible for keeping accurate accounts of the trust’s finances and transactions. They must also provide beneficiaries with regular reports on the trust’s performance and financial position. This helps ensure accountability and allows beneficiaries to monitor the trust’s activities.

Legal and Tax Compliance

Trustees must comply with all relevant legal and tax requirements. This includes filing tax returns, paying any taxes due, and adhering to regulations governing trusts in Scotland. Failure to comply with these obligations can have serious consequences for both trustees and beneficiaries.

In summary, trustees in Scotland have significant duties and responsibilities, all aimed at ensuring the proper management and administration of trusts for the benefit of the beneficiaries. By adhering to these duties and acting with integrity and diligence, trustees can fulfil their role effectively and uphold the wishes of the trustors.

If you are thinking of your future and you are looking for an experienced solicitor, then please contact our Private Client Team on 01324 622 888 or contact help@randa-fa.co.uk and we would be delighted to assist.

Leave a Reply