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 that you use a professional trust administrator to handle trust administration for you. Doing this relieves you of what would otherwise be an annoying administrative burden, helps to protect you from potential legal liability, protects the validity of your trust, and ensures that proper procedures are followed.

We have been providing administrative services to trustees since 2014. We also work with partners to provide tax and accounting for trusts.

If you are considering setting up a trust, or if you already have a trust and need help with administration, contact us for more information.