Losing a parent or guardian is one of the most difficult experiences a child can face. Alongside the emotional impact, there are also practical considerations—particularly around managing inheritance. One of the most effective ways to ensure that a child’s inheritance is protected and used appropriately is by setting up a bereaved minors trust.
A key element of this trust is the appointment of trustees. Trustees are responsible for managing the inheritance until the child reaches the age of 18 and can access the assets themselves. It is critical to choose the right trustee, as their decisions will impact the financial wellbeing of the child for many years.
At Blackstone Solicitors, we understand how important it is to ensure that a bereaved minors trust is set up and managed properly. In this article, we will explain the role of a trustee, the qualities to look for in a trustee, and how to choose the right person or professional to fulfil this crucial responsibility.
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What Is a Bereaved Minors Trust?
A bereaved minors trust is a legal arrangement that holds and manages a child’s inheritance after the death of one or both parents. The trust ensures that the inheritance is protected and used only for the child’s benefit until they reach the age of 18, at which point the assets are released to them in full.
The role of the trustee is fundamental to the success of this arrangement. Trustees have a fiduciary responsibility to act in the best interests of the child, ensuring that the assets are managed effectively and securely.
What Does a Trustee Do?
A trustee is responsible for managing the trust assets and making decisions about how and when to release funds for the child’s benefit. Here are some of the main duties of a trustee:
- Managing Trust Assets
Trustees are tasked with maintaining and growing the trust assets. This may involve making investment decisions, ensuring the assets are secure, and regularly reviewing the performance of the trust.
- Distributing Funds for the Child’s Benefit
Trustees have the discretion to release funds for the child’s benefit, such as paying for education, healthcare, or general living expenses. Trustees must act in the child’s best interests when making these decisions.
- Protecting the Inheritance
A trustee must ensure that the inheritance is shielded from potential risks such as mismanagement, creditor claims, or disputes.
- Ensuring Legal Compliance
Trustees are responsible for complying with the legal requirements related to trust management, including filing tax returns and following relevant trust law.
Qualities to Look for in a Trustee
Choosing the right trustee is essential for ensuring the success of a bereaved minors trust. The trustee should be someone who can handle the responsibilities involved and who will act in the best interests of the child. Here are some key qualities to look for:
- Trustworthiness
The trustee must be someone you can rely on to act with integrity and honesty. As the trustee will have control over the child’s inheritance, they must be able to demonstrate trustworthiness and a commitment to managing the assets responsibly.
- Financial Knowledge
While it’s not necessary for a trustee to be a financial expert, they should have a basic understanding of financial matters. Managing the assets of the trust, including investments, requires a sound knowledge of how to preserve and grow the inheritance. If you appoint a non-professional trustee, it may be worth considering whether they should work with a financial advisor to ensure proper asset management.
- Impartiality
It’s crucial that the trustee is impartial and able to make decisions based solely on the child’s best interests. This is especially important if there are other beneficiaries, such as siblings, involved. A trustee must avoid any personal conflicts of interest and must not favour one beneficiary over another.
- Responsiveness and Availability
Managing a trust requires attention and a reasonable level of time commitment. The trustee should be someone who can be relied upon to act promptly and effectively when required. Trustees may need to make timely decisions about distributions or investments, so they should be accessible and responsive when the need arises.
- Legal and Ethical Responsibility
A trustee must understand their legal responsibilities and have the commitment to act in accordance with the law. This includes ensuring compliance with tax rules, keeping accurate records, and ensuring the trust is administered according to the terms set out in the will or trust deed.
- Good Communication Skills
A trustee should be able to communicate clearly and transparently with the child’s family and any other involved parties. This includes providing updates on the trust’s performance, discussing any distributions, and making sure everyone understands the trust’s terms and conditions.
Choosing Between a Professional Trustee or a Family Member
When selecting a trustee, you have two main options: appointing a family member or friend or choosing a professional trustee, such as a solicitor, accountant, or trust company. Each option has its advantages and disadvantages, so it’s important to carefully consider your needs.
- Family Members or Friends
One advantage of appointing a family member or friend as a trustee is that they will typically have a close relationship with the child and may have a strong desire to act in their best interests. They may also have a personal understanding of the child’s needs and wishes, which can be helpful when making decisions.
However, there are potential drawbacks. Family members may lack the financial expertise required to manage the trust effectively, or they may be emotionally compromised by the loss of the parent. In some cases, family members might not want the responsibility of managing the trust, or they may feel conflicted if there are other family members involved.
- Professional Trustees
Professional trustees, such as solicitors or trust companies, offer a high level of expertise and experience. They are skilled at managing trusts, making investment decisions, and ensuring legal compliance. This option provides peace of mind that the trust is being managed with professionalism and impartiality.
However, professional trustees charge fees for their services, which can vary depending on the complexity of the trust and the assets involved. Additionally, professional trustees may not have the personal connection to the child that a family member might provide, which can sometimes affect the trustee’s decision-making.
Some families choose a combination of both—appointing a professional trustee to handle the technical aspects of the trust and a family member to provide personal oversight. This can provide the best of both worlds.
Steps to Take When Appointing a Trustee
- Discuss with the Potential Trustee
Before appointing someone as a trustee, it’s important to have an open conversation with them. Ensure that they are willing to take on the role and understand the responsibilities involved. This is also an opportunity to discuss any concerns you might have about the trust.
- Review Their Qualifications
For a professional trustee, check their qualifications, experience, and reputation. If you are considering a family member or friend, evaluate whether they have the skills and temperament to handle the role responsibly.
- Consider a Trust Company
If you are unsure about appointing an individual trustee, consider using a trust company. These firms specialise in trust management and can provide expert advice and administration.
- Set Clear Expectations
Ensure that the trustee understands what is expected of them. Clarify their role in managing the trust, making distributions, and communicating with the family.
Conclusion
Choosing the right trustee for a bereaved minors trust is a critical decision that will impact the child’s financial future. The trustee’s role is to safeguard the inheritance, make decisions in the child’s best interests, and ensure the trust is managed properly until the child comes of age.
At Blackstone Solicitors, we have extensive experience advising families on trust and estate matters. Whether you are setting up a bereaved minors trust or looking for assistance in selecting the right trustee, our team is here to help. We can guide you through the process, ensuring that your child’s inheritance is protected and managed with care and expertise.
Contact Blackstone Solicitors today to discuss how we can assist with your trust and estate planning needs.
We have a proven track-record of advising upon all aspects of private client work. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.to incorporate, what kind of ownership
How to Contact Our Private Client Solicitors
It is important for you to be well informed about the issues and possible implications of dealing with trusts. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.
To speak to our Trust solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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