Exercise reasonable care and skill

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Whilst it is possible for the Settlor to be a Trustee, it is highly unusual and would defeat any tax planning objectives. In theory a Beneficiary could also be a Trustee, but this is normally excluded by the Trust Deed and would conflict with the Trustees’ duties discussed below.

Each common law jurisdiction will have its own suite of pertinent legislation that the Trustees must abide by. In the Isle of Man, the relevant law includes the Trustee Act 1961, Trust Act 1995 and Trustee Act 2001 among other Acts. Many of these entrench and develop on previously existing common law doctrines, as well as add to them, to provide more clarity and certainty e.g. the Trustees duty of care in relation to powers of investment and the professional standards expected of them.

In fact, duty of care lies at the heart of the Trustee’s role. All Trustees are beholden to fiduciary duties, like a company’s Directors. This means that Trustees are jointly and severely liable for the actions they take (or don’t take) in respect of the Trust. These general duties are briefly summarised below:

considering the capacity of their appointment and any specialist skill or pakistan mobile database knowledge i.e. acting as a professional or lay Trustee etc.;
To understand and carry out their obligations in line with the terms of the Trust;
To maintain and act in the interest of the Beneficiaries, keeping it separate from their own assets;
To avoid conflicts of interest e.g. situations where the Trustee may make decisions for personal gain, or gain of others by disadvantaging the Beneficiaries;
To act fairly and with impartiality towards Beneficiaries;
To exercise powers only for the purposes they have been given and in good faith
To provide an accurate account of the Trust Fund upon the Beneficiary’s request.
There is also a duty for the Trustee to act gratuitously unless otherwise stated within the terms of the Trust; but most modern arrangements make provision for reasonable remuneration.

In the UK, Trustees are not regulated and do not need to be licensed. However, in jurisdictions such as the Isle of Man, in addition to the statutory and common law protections available, Professional Trustees are regulated by the Isle of Man Financial Services Authority and licensed under the Financial Services Act 2008.