For Trustees, administering a Trust correctly is important, but it can also be challenging
For Trustees, administering a trust correctly is important, but it can also be challenging. If you fail to administer correctly then you run the risk that the trust will not be effective.
Correct administration is also important for your own protection. Correct administration means:
- You are required to keep accurate records for legal and accounting purposes.
- You need to prepare and file a tax return for the trust.
- You need to establish a trust ‘minute book’, which records all decisions of the trustees as well as other important matters such as distributions.
- You need to regularly check that your actions, and the status of the trust and its investments remain legally compliant.
If someone challenges the validity of the trust, and if they can show that you did not administer the trust correctly, or that it was treated it as an ‘offshoot’ of the founder’s personal finances, then it strengthens their argument considerably. This is one of the reasons why the trust should be administered independently of the founder’s own personal finances.
We strongly recommend you employ a professional trust administrator such as Svěřenské fondy a trusty s.r.o. to handle trust administration for you. Doing so relieves you of what would otherwise be an annoying administrative burden, protects you from potential legal liability, protects the validity of the trust, and ensures that proper procedures are followed.
We may be able act as administrator of trusts even if they were not established by us. If you are interested in exploring this possibility, please send us a copy of your trust documentation.
If you have your own accountant, we can offer you a basic trust administration service at a competitive price. We can also offer accounting and tax assistance. Click here for more information on the different administration packages we offer.