All too often, when clients set up a trust, they will appoint family members to act as trustees.
Clients need to be encouraged to carefully consider this decision, as the role of trustee carries with it a number of responsibilities. When choosing a trustee, clients need to consider:
- Do they understand trust law?
- Do they understand their responsibilities under the numerous Trustee Acts?
- Can they keep up to date with changes in trust legislation?
- If the trustee is the settlor’s spouse, what would happen in the case of divorce or death or remarriage?
- If they are the settlor’s children, could they fall out?
- Does the settlor want their family to know about their financial affairs?
Another option to consider is appointing a professional corporate trustee. This can remove the potential burden from family members, and possibly remove a barrier to trust planning for the client, helping to simplify the process.
The key benefits of choosing a corporate trustee include:
- Continuity, as corporate trustees do not die
- The corporate trustee keeps up to date with trust developments
- They are independent and impartial
- It avoids personal/family conflicts
- Ease of administration: dealing, form-filling, trust records
The 10 year periodic charge is something that affects a number of trusts. A professional trustee can take care of the responsibility for calculating and reporting any tax charge directly to HMRC, and deducting the charge from the assets held in the trust.
Quilter International Trust Company (OMITC)
With OMITC, your clients can be reassured that a team of in-house experts are managing the trust on their behalf. OMITC can be used as trustee for a range of Quilter International trusts, with a straightforward application process, and no set-up cost.
OMITC’s fee increases each year in line with Isle of Man inflation. The fee is currently just £420 (including VAT) paid annually in advance and is increasing to £434.40 (including VAT) from 1 January 2019*.
If you would like to help your UK domiciled clients make an informed decision over who should act as trustee, please share with them ‘A guide to trusts by Quilter International Trust Company’.
*Please note: existing OMITC clients will be informed of the inflation fee increase when they receive their annual trust review.