A Practical Guide to Being a Trustee
What To Do, How To Do It, and How To Protect Yourself In The Role
Being asked to act as a trustee is often presented as a favour — a friend or family member trusts you, and you say yes. In legal terms, though, you have taken on one of the most demanding and personally accountable roles that the law recognises. This guide is for people who have accepted (or are about to accept) the role and want to know how to do it well in practice.
For the broader picture of what a trustee is and the legal duties that come with the role, see our Trustee Responsibilities page. This page is the practical companion: the things you actually need to do, in the right order, to run a trust properly.
The First Thing To Do: Understand The Trust You're Managing
Before anything else, every new trustee should sit down with the trust deed and read it from beginning to end. The deed is the constitution of the trust – it tells you what you can and can't do, who the beneficiaries are, what powers you have, and what restrictions apply. Most trustee errors begin not with bad intent but with acting outside what the deed actually allows.
You should also understand the three parties involved:
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The settlor — the person who created the trust and put assets into it.
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The beneficiaries — those entitled (or potentially entitled) to benefit, whether through income, capital, or use of trust property.
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The trustees — you and your co-trustees, who hold and manage the assets for the beneficiaries.
A practical point on trustee numbers: for a trust holding land in England and Wales, you'll typically need at least two trustees (or a trust corporation) for proper administration, and no more than four can normally be registered as legal owners of the land. For other trusts, the position is more flexible, though most trusts work best with at least two trustees for continuity and oversight. The deed itself will usually specify the minimum and maximum.
Your Core Duties In Practice
Several legal duties shape everything a trustee does. The Trustee Act 2000 sets out a statutory duty of care, which requires you to act with the skill and care reasonable in the circumstances – judged against what an "ordinary prudent person" would do, but with a higher standard expected of trustees who have, or hold themselves out as having, particular expertise.
In practice, this means:
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Always act jointly with your co-trustees. Trustees normally make decisions together. Acting alone – or letting one trustee dominate decisions – exposes the others to risk.
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Stay within the deed. The trust deed defines the powers, restrictions and the class of beneficiaries. If something isn't covered, you should get advice before acting.
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Document everything. Decisions, meetings, reasoning, advice taken. Good records are the single best protection against a future dispute or HMRC challenge.
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Take professional advice where appropriate. The law expects you to seek expert advice on investments, tax and complex legal questions, unless there's a clear and reasoned basis not to.
Investing Trust Assets Properly
Investment is one of the areas where trustees most often come unstuck — and the area where the personal liability for negligence is most often invoked. There are a few essentials:
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Prepare an Investment Policy Statement (IPS). This is a written document — agreed upon by all trustees — setting out how the trust's investments will be managed, the level of risk, the objectives, and the schedule for review. An IPS is one of the most important pieces of documentation a trustee can produce, both for sound management and as evidence that decisions have been taken thoughtfully.
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Take regulated investment advice. Save in unusual circumstances, trustees should work with an authorised investment adviser or discretionary fund manager. The duty to take advice is not just good practice — it's a statutory expectation.
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Review the investments regularly. At minimum annually; more often where there are significant decisions or changes in circumstances. Each review should be properly minuted.
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Balance the beneficiaries' interests. Where the trust has multiple beneficiaries with different needs — a life tenant entitled to income and remaindermen entitled to capital, for example — the investment approach must be fair to both.
HMRC, the Trust Registration Service, and Ongoing Reporting
Since the Trust Registration Service (TRS) was expanded in 2020 and 2022, almost all UK express trusts must now be registered with HMRC — including most non-taxable trusts that previously sat outside the regime. The deadlines are strict:
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A new trust must be registered within 90 days of being created.
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Any subsequent change — a new trustee, a change of address, or a beneficiary being named — must be notified to HMRC within 90 days.
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For taxable trusts, an annual declaration is required by 31 January each year, confirming the register is up to date.
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Penalties of up to £5,000 can be applied for failures to register or update — and trustees are personally liable. In practice, HMRC normally issues a warning before applying a penalty, reserving fines mainly for deliberate or repeated non-compliance.
Trusts that generate income, realise capital gains, or carry out other reportable events will also need to file tax returns. The detail varies by trust type, and we routinely guide trustees through it.
Loans From The Trust: A Useful But Technical Tool
Trustees sometimes use loans to beneficiaries as an alternative to outright distributions. A loan can keep the trust's capital intact, create a debt against the beneficiary's estate (which can be useful for that beneficiary's own inheritance tax planning), and provide a means of support that doesn't compromise means-tested benefits or expose funds to a beneficiary's divorce.
That said, loans from a trust must be made properly: agreed to by all trustees as a considered exercise of their powers, documented in writing with clear terms, interest where appropriate, and (in the case of larger loans) sometimes secured. They are not an informal favour – and trustees should always take advice before lending, particularly where the loan is significant or open-ended.
Running Effective Trustee Meetings
Most well-run trusts hold formal trustee meetings at least once a year, with additional meetings when significant decisions arise. Each meeting should:
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Review the trust's investments and the IPS.
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Consider beneficiaries' current circumstances and any requests received.
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Confirm continued compliance with HMRC and TRS obligations.
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Document any decisions and the reasoning behind them.
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Set actions and review dates for the next meeting.
Properly minuted meetings are one of a trustee's most important protections. If a decision is ever challenged — by a beneficiary, by HMRC, or by a future co-trustee — the minutes are what stand between you and the question of whether you acted reasonably.
How We Support Trustees
Trustees have real, ongoing, and personally enforceable duties — but they don't have to carry them alone. We work with trustees in two main ways:
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As ongoing professional advisers, we support family trustees with the legal, tax and administrative work that comes with the role — including drafting investment policy statements, registering and updating the trust with HMRC, holding and minuting meetings, preparing accounts, and reviewing the trust periodically.
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As professional trustees in our own right, we provide institutional continuity, independence and expertise as part of the trustee body when the family wants this.
Either way, our aim is to give trustees the confidence to do the role properly — protecting both the beneficiaries and the trustees themselves.
Talk To Us About Your Trustee Role
Whether you've just been asked to become a trustee, have been acting as one for years and want a proper review, or are thinking about appointing professional support to an existing trust, we'd be glad to help.