Making a will
What is a trustee (and when do I need to create a trust in my will?)
What’s a testamentary trust?
A trust is a way for someone to look after property for someone else. A testamentary trust ultimately functions the same as other types of trusts, like family trusts, and uses the same language:
- the “trustee” is the person or organisation who is looking after the property
- the “beneficiary” is anyone or any organisation who will eventually receive (or will benefit from) the property
- the “settlor” is the person who owned the property and set up the trust.
Trustees must follow the instructions given by the settlor. Usually, these instructions are set out in a “trust deed,” but if you create a testamentary trust, your instructions will be set out in your will.
For example, you can set up a testamentary trust so that someone can look after your property until your children are old enough to own it themselves (see: “Who will look after my children if I die while they are young?”).
What does a trustee do?
Administration Act 1969, ss 13, 63 Trusts Act 2019
Trustees have legal obligations to act reasonably and in good faith for all beneficiaries.
The legal ownership of all the property in the estate will pass to the trustee. The trustee must hold it for the beneficiaries, and then distribute all the property according to the instructions in the will.
Sometimes the trustee’s role may continue for some time, for example, where the will provides for children to benefit when they reach a certain age.
Who can be a trustee?
The roles of executor and trustee are often combined in a single person.
There are some restrictions about who you can choose to be a trustee. You can’t choose someone under 18, someone who doesn’t have the capacity to manage the role, or a person or company currently going through bankruptcy or insolvency.
Do I have to get the person’s consent to appoint them as a trustee?
It isn’t legally required to get someone’s permission before appointing them as a trustee. However, it’s a good idea to ask them, as they might refuse the role after your death.
Does a trustee get paid?
Trustees can get paid for their services only if this is provided for in your will. If the trustee is a professional (for example, a lawyer, accountant or trust company), they will generally ask for your will to include arrangements for their payment.
