Robert Cartmell explains the options for Trustees wishing to retire or relinquish their role within a Trust.
There are different types and styles of Trust and many have been around for a long time. There has never been so much popularity and discussion as to the uses of Trusts as there is today.
The Role of a Trustee
I, Robert Cartmell, have seen and advised many families who have included Discretionary Trusts within their Wills or alternatively Life-Interest (interest in possession Trusts and/or immediate post-death interest Trusts). It can be easy for the lay person to forget some of the reasons for using such structures and therefore the role of the Trustee is particularly important.
Being a Trustee is a burden
You may not have been fully consulted as to the scope of the role of Trusteeship or indeed the scope and nature of the role may have changed. It is a burden and a responsibility to be a Trustee. Unless you are a trustee in the normal course of your business activities, you will not be remunerated for your time and conduct. Therefore, it is understandable that people appointed to be a Trustee may (after a time if not immediately) seek to understand more of their options and whether they can delegate the processes effectively.
Being a Trustee is now in the ‘public’ arena
Recent heightened awareness of the requirements to have Trusts registered with the Trust Registration Service has led families to seek advice on the scope and responsibilities for Trustees.
Other reasons for considering a formal retirement as Trustee
Other reasons for wishing to retire as a Trustee (or have someone retired) are:
- The beneficiaries wish for the control of the Trust to pass to other persons;
- The co-trustees wish to retire a co-trustee for ease of administering the Trust;
- Where a Trustee has not performed his/her functions reasonably;
- Where a professional Trustee is desired to be appointed in place of lay trustees for expertise or independence to be brought to the role;
- Where a lay trustee (or trustees) is preferred to the role in place of a professional Trustee in cases of simple trusts or in the attempt of saving cost.
Whatever the circumstance above, the usual approach even in contentious cases is to seek voluntary retirement of the Trustee.
Wishing to retire as a Trustee?
If you no longer wish to act as a Trustee, then it should be straightforward enough to retire from the role. First, consult with your co-Trustees, as it is usually they who would carry on in your stead and it is they who would be able to confirm an appointment of a replacement for you. Then take professional advice on all the aspects of your retirement.
What documents do you need to execute to retire?
- Deed of Retirement: a Deed is a formal binding document that confirms your retirement from the ongoing role of being a Trustee. Within this document, you, and the remaining Trustees can also confirm who might be appointed to replace you.
- Trust Property: your name may be on HM Land Registry legal title deeds. That will need to be changed, which will take time and there are forms to complete and possibly ID requirements at solicitors. Likewise, if you are the point of contact for bills/insurance/property outgoings, this will also need to be changed.
- Trust Bank Account: your name will need to be removed and any new Trustee added.
- Trust Investments: your name will need to be removed and any new Trustee added.
- Papers and Documents: returning originals to ongoing Trustees. Digital files likewise.
- Retain a copy of the trust’s file (and take advice)
- Ensuring the ongoing Trustees update the Trust Registration Service (TRS) with the change in trusteeship details.
Choosing a suitable replacement – what are the criteria?
A Trustee must be capable of understanding the terms of the Trust (in layman’s terms at least) and the objectives and wishes of the creator of it.
A Trustee must be then able to properly communicate with Co-Trustees, beneficiaries and third parties (such as HMRC).
A Trustee must be able to give clear instructions and advice. In particular, they must be able to respond in a timely manner to requests.
A Trustee must act in the best interests of the Trust and its purposes. They must be happy and willing to take on the role.
Choose your Trustees bearing those points in mind. It helps the smooth running of the Trust (and also keeps time-cost down) where the Trustee responds swiftly to communications and reads documents properly and fully to ensure they are attending to their duties. Likewise, it helps for a Trustee to be versant in email communications and able to process information and documentation relatively quickly.
If you would like help or advice from Robert Cartmell on the issues raised in this article, please get in touch. Email Robert Cartmell Consulting at info@robertcartmell.co.uk to make an enquiry or arrange a discussion.