Utilising a professional trustee can be daunting prospect. Handing over your worldly assets to someone you have potentially never met face to face could easily keep you awake at night. However, there are many benefits to utilising a professional trustee and with the ever increasing burden of reporting, record keeping, GDPR and onerous fiduciary responsibility that are placed on all trustees, engaging with one in a high regulated jurisdiction is key.
So firstly why use a professional trustee?
As alluded to above, the fiduciary responsibility is onerous and implies a fundamental ‘duty of care’ to the beneficiaries. This means that the trustees must ensure that there is no conflict of interest between their duty to the trust and any other duties that they may have. Furthermore, they must subordinate their own personal interests to those of the beneficiaries. So when it comes to family assets choosing someone independent would be a natural fit. Often establishing trusts can involve tax advice and the trustee will ensure the appropriate tax advisor is on hand to ensure matters are dealt with correctly.
Another fundamental duty of the trustee is to invest the trust fund so that the beneficiaries' interests are enhanced, the responsibility of monitoring, ensuring monitoring takes place and then where appropriate, action is taken, rests with the trustee also.
With the advent of FATCA, CRS and ongoing reporting and tax transparency it’s important this is also kept up to date. Suddenly it starts to look like having a professional in place is a must.
When seeking out a professional trustee the key aspects to consider are:
- Is the trustee regulated;
- Where are they regulated;
- Does the jurisdiction have robust regulatory standards when it comes to the prevention of corruption, bribery and money laundering;
- How long have they been providing services; and
- The size of the firm, board composition, level of expertise and experience of the individuals.
At a business level ensuring a healthy business relationship can be developed and maintained with the trustee, that the trustee is pro-active, impartial, not conflicted and competitive when it comes to fees remain basic but fundamental requirements.
The benefits of a professional independent trustee are wide but can include:
- The avoidance of family conflict;
- Expert opinion and knowledge; and
- Internal resources to administer the reporting obligations and onerous fiduciary responsibility placed on every trustee.
Here at Peregrine we have almost 35 years’ experience of providing professional trustee services, ranging from handing simple family trusts for educational purpose, high value family wealth trusts to providing administration services to UK solicitors seeking additional support for trusts they manage.
Peregrine Corporate Services Limited is licensed by the Isle of Man Financial Services Authority.