An independent trustee is an individual or organization appointed by a court or other legally appointed authority to manage and administer a trust. The independent trustee has the legal responsibility to act in the best interests of the beneficiaries of the trust, and to carry out the trust deed, often with financial and legal advice from other professionals. The aim of an independent trustee is to help ensure that the trust assets are managed in a prudent and cost-effective way, with fairness and propriety.
Types of Trusts and the Role of an Independent Trustee
Trusts are financial vehicles often used to pass assets on to beneficiaries, or to achieve specific financial goals. Depending on the type of trust, the role of the trustee may vary. As an example, a trustee may act as an investment advisor or tax specialist when administering a trust for estate planning purposes. In the case of a charitable trust, a trustee may be responsible for activities such as selecting beneficiaries, distributing funds and tracking the trust’s expenditures.
Benefits of an Independent Trustee
The role of the independent trustee is to ensure that the trust is operated and managed in the best interests of the beneficiaries. This may include hiring and monitoring professional advisors, keeping financial accounts and records, and investing the trust assets prudently.
The independent trustee also acts as a buffer between the trust and the beneficiaries, to ensure that any arguments and disputes that may arise over the operation of the trust can be dealt with objectively and in a timely manner. This can be especially beneficial in family trusts, where potential conflicts of interest may arise.
Finding the Right Independent Trustee
Choosing the right independent trustee is essential to the successful management of the trust. It’s important to find a trustee that is knowledgeable about trust law and can provide the necessary guidance and advice to ensure the trust is managed in a cost-effective and transparent manner. A highly experienced and capable trustee can play an invaluable role in helping to secure the trust’s assets and fulfil the wishes of the grantor.