Many ultra-high-net-worth clients we serve have multiple entities to manage their wealth. Alongside a Family Office, many families have a trust that allows them to protect their assets and pass on wealth to family members effectively.
A trust is set up by the settlor, and the individual who is chosen to manage the trust on behalf of the beneficiaries is known as the Trustee.
Trustees wield immense responsibility, ensuring the seamless orchestration of assets and affairs, so it is worthwhile examining this pivotal role, their duties and responsibilities and their importance to ultra-high-net-worth families.
Understanding trusts
A family trust is often set up for the following reasons:
- Setting funds aside for future generations.
- Passing assets on to a child or grandchild until they are older.
- Protecting assets when entering marriage.
- Ensuring a spouse can benefit from family assets for the rest of their life before assets are passed on to children.
- Tax efficiency, as a Trust can effectively cut down on the tax being paid on inheritance.
- Protecting assets against claims from creditors when self-employed.
- Retain control and asset protection for the beneficiaries.
Duties and responsibilities of a Trustee
A Trustee acts as a custodian for the assets held within a trust. Being responsible for the wealth of the family they therefore owe duties of honesty, integrity and loyalty to the beneficiaries of the trust, acting exclusively in the best interests of the trust and the family.
The role of the Trustee encompasses a variety of critical duties, which may include:
- Act as a fiduciary.
- Hold and administer the trust for the interests of the beneficiaries.
- Invest assets when necessary.
- Keep beneficiaries informed about the trust.
- Overseeing trusts and estates.
- Navigating legal issues related to the operation of the trust.
- Collaborating extensively with specialist advisors to harmonise the trust's management strategy.
- Maintaining meticulous records of all financial activities, ensuring transparency and accountability.
- Distributing funds to beneficiaries.
Who can be a Trustee?
The person who set up the trust, also known as the Settlor, must choose an individual to be the Trustee. Obviously, it is very important to choose the right Trustee due to the enormous amount of wealth on the line.
Because ‘trust’ plays such an important part in choosing a Trustee, families commonly appoint one from their close friends or from within the family. Having someone who is close to the family and has a great understanding of the its dynamics can be hugely beneficial. This will also offer the beneficiaries peace of mind.
Another route many families choose is appointing a lawyer or an attorney as their Trustee. Appointing a non-partial third party in an important role can avoid drama and resentment. This being said, families are encouraged to appoint someone who has a long-standing relationship with them.
What Families should look for when hiring
Apart from the family choosing someone they trust as the Trustee, they must also look for candidates with robust financial understanding, legal proficiency and interpersonal skills. This is a very demanding role. Especially for Trustees who are non-family members, adaptability and agility are indispensable qualities, enabling them to navigate family dynamics.
While trying to identify a Trustee, we would like to emphasise the best practice of appointing a Protector of the Trust to oversee the Trust and Trustee’s actions. This practice is essential, given instances where trustees have abused their authority, breaching the trust of the family.
Leveraging specialist recruitment consultancy services, such as Agreus, can prove instrumental in identifying candidates who not only possess the requisite skills but also embody the ethos of familial stewardship. Having operated within the Family Office space for over a decade, Agreus Group realised the value we could add to Family Offices by working closely with Trusts and have been working closely with Trusts and Corporate Services ever since.
With a proven track record in Family Office and Trust and Corporate Services recruitment, Agreus specialises in identifying and connecting ultra-high-net-worth clients with top-tier candidates. Seize the opportunity to elevate your Family Office or Trusts with Agreus's bespoke recruitment solutions, tailored to your unique needs and aspirations. Contact us to find out more.