The position of a Trustee is an important position. The Trustee’s duties are covered between legislation in each state, commonwealth legislation and case law. Trustees can be individuals, one or more than one and also companies.
Trustees of family trusts have many duties. Many of these have been formulated by Judges through case law over the ages. Broadly speaking, the Trustees:
- Must act in good faith
- Must act personally
- Must act unanimously where multiple Trustees are involved
- Must not be dictated to by others (ie beneficiaries)
- Have a duty to consider how distributions should be made and to whom
- Have a duty to avoid fettering of discretion.
The Trustee also has fiduciary duties which exist alongside the various statutory obligations imposed on Trustees.
Let’s have a look at some of these duties more closely .
Duty to act personally.
Duty to Act Unanimously
What happens when there is more than one Trustee – can one Trustee not consider a matter and leave it to the other Trustees to decide upon?
In essence where multiple Trustees are involved, any decision by them must be joint and unanimous.
Please note , a statutory exception exists for trustees of Self-Managed Superannuation Funds. Speak to our Trust Lawyers for more information