Being a trustee: What you need to know

Trusts form a vital part of long-term financial planning, helping families protect wealth, provide for loved ones, and plan for later-life care with greater control and flexibility. They can also support a smooth succession for business owners.

We use trusts strategically alongside pensions, investments, and estate planning to deliver tax-efficient, bespoke solutions that align with our clients’ goals. Within PKF Francis Clark, our dedicated trusts and estate team works closely with us to provide joined-up planning that supports our holistic approach

More families are turning to trusts as an estate planning tool for a variety of reasons, these may include:

• Increasingly complex modern family dynamics
• Longer life expectancies leading to concerns about diminished capacity in later life
• Growing inheritance tax pressure due to frozen thresholds and legislative reform

The most recent government figures reveal that there were 121,000 new trusts registered on the Trust Registration Service in 2024/25, compared to 115,000 in 2023/24.

While more people are talking about trusts, conversations often focus on their potential tax and succession planning benefits, with the responsibilities of being a trustee often overlooked.

And yet, this is an important role with significant legal, financial and practical responsibilities, which is why choosing the right trustee – and carefully considering whether to become one – is crucial.

Keep reading to learn how trusts work, what it means to be a trustee and how to assess whether someone is fit for the role.

Trusts and how they work

A trust is a legal arrangement to manage money or other assets for the benefit of one or more people.

Your financial planner might recommend trusts if you have money to invest or wish to make gifts while retaining control over how and when those assets are accessed. For example, setting up an investment through a trust structure can provide flexibility, protection for beneficiaries and potential tax efficiencies, while ensuring the assets are managed in line with your wishes.
If you require a standalone trust – for complex family or business arrangements, and so on – our colleagues in the PKF Francis Clark trust and estate team can work closely with your legal advisers to provide a joined-up approach to setting up and managing the trust, including help with tax advice and tax returns for the trust.

There are many different types of trust, each with its own features, legal considerations and tax implications. Your financial planner will explain the options available and help you choose the most appropriate type depending on your goals and broader financial plan. This might include using trusts to protect wealth for future generations or as part of a gifting strategy.

Regardless of the type you choose, there are three main people involved in a trust:

• The settlor – The person who puts assets in the trust
• The beneficiary – The person who benefits from the trust
• The trustee – The person appointed to manage the trust

More than one person may fulfil each role.

A trustee’s responsibilities and duties

A trustee’s core responsibilities under the law include:

• Following the terms of the trust (more on this later)
• Always acting in the best interests of the beneficiaries
• Exercising reasonable care based on individual skills and experience when making decisions
• Acting prudently with investments
• Avoiding conflicts of interest
• Making decisions together, when required, if there are multiple trustees

A trustee must also familiarise themselves with the trust agreement, which will set out their specific responsibilities and powers. Some general duties might include:

• Managing investments responsibly
• Keeping accurate accounts and records
• Overseeing and protecting trust property
• Communicating transparently with beneficiaries
• Managing income and capital in line with the trust deed and the interests of the beneficiaries

Potential challenges of being a trustee

As you can see, the role of a trustee carries significant responsibility.

Before appointing someone to this position, or accepting it yourself, it’s important to consider the potential practical and personal challenges trusteeship could present, including:

• Time commitment and administrative burden
• Pressure from beneficiaries and family members
• Emotional strain of being responsible for the trust
• Potential for damage to personal relationships if disagreements arise
• Complex decision-making around unfamiliar financial and legal matters
• Risk of personal liability where trustees act outside their powers, breach their duties, or enter into obligations without adequate protection or indemnity

It’s important to note that stepping down as a trustee doesn’t normally remove responsibility for decisions or breaches that occurred while the individual held the position.

Reasons to become a trustee

Although being a trustee comes with responsibilities and challenges, there can also be good reasons to accept the role, including:

• You could play a direct role in helping beneficiaries by making sure trust assets are used to provide for and protect them
• The position may provide opportunities to develop new skills, such as managing trust accounts and keeping accurate records
• Trusteeship could be personally meaningful and rewarding, especially where it helps a family preserve wealth for future generations or support someone vulnerable
• You don’t have to manage everything alone; we can work closely with our trusts and estate team in PKF Francis Clark and your solicitor to help provide specialist support

Choosing a trustee

A trustee can be a family member or friend, a professional (for example, a solicitor or accountant) or a corporate entity (such as a bank).

Here are a few qualities to consider when choosing a trustee (or deciding whether to become one):

1. Trustworthiness – They must be committed to managing the trust in line with its terms and in the interests of the beneficiaries
2. Financial literacy – A trustee does not require any specific skills or qualifications, but it’s generally helpful if they have basic money skills
3. Reliability and organisational ability – A trustee needs to be consistent, transparent and keep meticulous records
4. Time – The role entails a range of responsibilities and tasks that require an ongoing commitment
5. Sound judgement and impartiality – They must remain fair and be able to make difficult decisions

Trusts can be a useful part of long-term financial planning, but whether to use one – and which structure is right for you – is not always a straightforward decision. Speaking to a financial planner or tax adviser can help you understand the options available and ensure any trust is aligned with your wider goals.

At Francis Clark Financial Planning, we have the benefit of working closely with the trusts and estate team in PKF Francis Clark so all your financial planning, tax and trusts advice is under one roof. This joined-up approach ensures your plans are coordinated, technically sound and designed to deliver the outcomes that matter most to you and your family.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only. All information is correct at the time of writing and is subject to change in the future. The Financial Conduct Authority does not regulate trusts.