What power does a Trustee have in a Will?
If you’re asking, "What power does a Trustee have in a Will?", this article will explain their legal authority. Trustees manage and administer assets placed in Trust under a Will, acting under the terms of the Trust deed and legal obligations to beneficiaries.
Investment powers
Under the Trustee Act 2000, Trustees may invest Trust assets in a wide range of investments as though they owned them personally, unless the Trust deed limits those powers. They must follow "standard investment criteria", which means selecting suitable and diversified investments that match the Trust’s purposes and beneficiaries’ needs. Trustees should also seek proper financial advice when required.
Distribution and income advance
Trustees may have discretion to provide income or capital distributions to beneficiaries according to the Trust’s terms. That can include making payments for schooling, maintenance, or welfare expenses for a minor or vulnerable beneficiary. In some Discretionary Trusts, Trustees carefully decide timing and amount of payments, weighing the best interests of different beneficiaries.
Asset management and acquisition
Trustees hold the authority to manage or acquire assets. This can include buying or selling land, reinvesting funds, or maintaining property held in the Trust. Trustees must manage Trust assets prudently and consider third-party agents or professionals when needed.
Delegation and insurance powers
If authorised by the Trust deed or law, Trustees may delegate administrative tasks to professionals like Accountants or Investment Managers. They may also insure Trust assets for liability or damage. Any delegation must be handled carefully and remain in the beneficiaries’ best interests.
Duty of care and impartiality
Trustees owe a fiduciary duty to act in the beneficiaries’ best interests and treat them impartially. They must avoid conflicts of interest and follow the instructions laid out in the Trust deed. If Trustees possess special skills (such as investing expertise), they are held to a higher duty of care than laypersons.
Trust deed guidance and limitations
The Trust instrument, typically the Will itself, sets out the precise powers the Trustee holds. If the Trust deed restricts certain actions, Trustees must follow those rules strictly. In particular, they should never exceed the authority granted, whether in investments, distributions, or handling assets.
Reporting and accounting obligations
Trustees must maintain accurate financial records and prepare accounts showing all Trust assets, income, and distributions. Beneficiaries have the right to review these accounts. Trustees must also file any required tax returns on behalf of the Trust for Inheritance Tax (IHT), Income Tax, or Capital Gains Tax (CGT).
Liability for breach of trust
If a Trustee acts beyond their authority, mismanages assets, makes improper investments, or fails in a duty, they may be personally liable for losses suffered by the Trust. They can be held responsible even for a co‑Trustee's breach in certain circumstances.
Final thoughts
So, what power does a Trustee have in a Will? Trustees hold legal authority over Trust assets, including investments, property, and distributions, subject to the terms set out in the Trust deed and the Trustee Act 2000. They must act with care, impartiality, and transparency, keeping accurate records and serving beneficiaries’ best interests at all times.
