Making sense of the Trustee Act 2000

While it might seem pretty obvious that trustees must look after the best interests of those who benefit from the trust, their obligation to do so is so important that the Trustee Act 2000 makes it a statutory duty of care.

The Act, which came into force in 2001 and applies in England and Wales, was designed to modernise the way that trustees oversee the management of investments held in trust and to give them a more general power of investment.

In effect, this means that trustees can make use of a wider range of investments than they were able to before the Act, including collective investments such as unit trust and investment bonds.

As well as the duty of care requiring the trustee to exercise “such care and skill as is reasonable in the circumstances” in everything they do in relation to the trust, there are specific responsibilities regarding what is known as the standard investment criteria.

This means that the trustee must make sure that any investment proposed or retained by the trust is suitable for it and must also consider the need to diversify investments, where appropriate.

Keith Lyons, a director of LRH Wealth Management Limited, says: “Many trustees are professionals, who are used to dealing with trust matters but for those who are not au fait with the issues and for non-professional trustees, meeting the obligations of the Act may seem daunting.

“In these circumstances, it’s wise to seek the advice of professionals in the field to ensure compliance with the Trustee Act 2000 and peace of mind for the trustee.”

LRH Wealth Management have a Trust Compliance flowchart available to assist trustees in identifying their resposibilities. Please complete the below form to download a copy of the checklist or for more information, please contact us.

To find out more about how we can help you, please contact LRH accountants in Halifax.