Trustee Responsibilities
Understanding the Role, the Duties and the Personal Accountability of Acting as a Trustee
A trustee holds a position of real legal responsibility. The role is sometimes accepted casually — as a favour to a family member or friend — but the duties of a trustee are formal, ongoing, and personally enforceable. Done well, being a trustee is one of the most rewarding ways to support a family across generations. Done poorly, it can expose the trustee to personal liability and bring the trust itself into dispute.
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This page sets out what trustees are actually required to do, the duties the law places on them, and what to think about before accepting the role.
What a Trustee Actually Is
When a trust is created, the settlor transfers ownership of certain assets to the trustees, who become the legal owners of those assets — though they hold them not for themselves, but for the beneficiaries. Everything a trustee does must be done in the beneficiaries' interests and in accordance with the trust deed.
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In law, a trustee owes what's known as a fiduciary duty: a duty of single-minded loyalty to the beneficiaries and the purposes of the trust. It's one of the strictest standards the law recognises, and it underpins everything a trustee does.
The Core Duties of a Trust
The day-to-day responsibilities of a trustee fall into several distinct duties — each of them taken seriously by the courts:
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Follow the terms of the trust deed. The trust deed is the trustee's constitution. Every decision must be within the powers it gives and consistent with the purposes it sets out.
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Act in the beneficiaries' best interests. All decisions must be made for the benefit of the beneficiaries, not for the trustees themselves or anyone else.
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Manage trust assets prudently. Trustees must look after the trust property responsibly — preserving it, investing it sensibly, and taking proper professional advice where needed.
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Treat beneficiaries fairly. Where there are multiple beneficiaries — for example, a life tenant and remaindermen — trustees must balance their interests evenhandedly rather than favouring one over another.
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Avoid conflicts of interest. A trustee must not put themselves in a position where their personal interest could conflict with their duty to the trust. Where a conflict arises, it must be properly managed.
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Keep accurate records. Decisions, accounts, investment reviews and meeting minutes must all be properly documented. Good records protect both the beneficiaries and the trustees themselves.
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Meet tax and reporting obligations. This includes registering the trust with HMRC's Trust Registration Service (TRS), keeping the register up to date, submitting any required tax returns, and meeting other regulatory obligations on time.
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Provide information to beneficiaries. Beneficiaries have legitimate interests in knowing about the trust, and trustees must be prepared to give appropriate information — although they don't usually have to disclose the reasons behind discretionary decisions.
Investment Duties: A Particular Area of Focus
Trustees are required to manage trust investments with reasonable care, taking proper financial advice unless there's a clear reason not to. Their underlying duty is to use the trust's investments to advance its purposes — usually by seeking an appropriate level of financial return within an acceptable level of risk.
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Recent case law (most notably Butler-Sloss v Charity Commission [2022] EWHC 974 (Ch), in the charitable context) has clarified that trustees have a degree of latitude to take ethical or mission-aligned considerations into account, provided they undertake a proper balancing exercise rather than making purely moral decisions. For most private trusts, the practical implication is that they should write down their investment policy, review it periodically, and obtain professional advice.
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Personal Liability — What Trustees Genuinely Need to Know
The aspect of trusteeship that's most often glossed over, and which trustees need to understand clearly, is that they can be personally liable for the consequences of their decisions:
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A trustee who acts in breach of their duties can be sued personally for any loss to the trust.
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A trustee can be personally liable for tax penalties — for example, where the trust is not registered on time or where reporting obligations are missed.
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A trustee can be ordered by the court to make good losses caused by negligent or improper investment decisions.
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In serious cases, a trustee can be removed from office and ordered to pay costs.
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This isn't intended to discourage anyone from accepting the role — most trustees serve faithfully for years without difficulty. But anyone considering becoming a trustee should accept the role with eyes open, and ideally with proper professional support behind them.
Regular Reviews are Part of the Job
A trust is not a "set and forget" arrangement. Trustees should hold regular meetings — at minimum annually, and more often where significant decisions are pending — to:
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Review the trust's investments and ensure they remain appropriate.
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Discuss the changing needs of beneficiaries.
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Confirm continued compliance with HMRC, TRS and any other regulatory obligations.
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Document the trustees' decisions and the reasoning behind them.
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Review whether the trust still serves its intended purpose, particularly as family circumstances and the law evolve.
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Well-run trustee meetings — minuted properly — are also one of the trustees' best protections, providing a clear record that decisions were taken thoughtfully and in line with the deed.
Who Should be a Trustee?
The right trustees are reliable, financially literate and able to remain impartial. Many families appoint a combination of:
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Family members, who bring close knowledge of the beneficiaries and the settlor's intentions.
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Professional trustees, who bring legal and tax expertise, continuity, and (often most importantly) genuine independence.
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A mix usually works best — particularly for trusts that may run for many years, where institutional continuity matters and family circumstances may change.
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How We Support Trustees
Many of the families we work with appoint us as professional trustees, or as ongoing advisers to family trustees who need expert support behind them. Either way, we help trustees with:
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Establishing the trust correctly and registering it with HMRC.
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Drafting investment policies and letters of wishes.
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Holding and minuting trustee meetings properly.
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Preparing trust accounts and meeting reporting obligations.
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Reviewing trusts periodically to keep them aligned with their purpose and current law.
Talk It Through With Us
Whether you're considering accepting a trustee role, are already acting as one, or are thinking about who to appoint to a trust you're setting up, we'd be glad to talk through what's involved and how we can support you.