The role of trustee is a thankless task. Given its ongoing nature, it is certainly easy to argue that it is more onerous than acting as an executor (and that is certainly not without its problems).
Acting as trustee can take up a considerable amount of time, place significant legal burdens on what you can and cannot do, often require an understanding of very technical aspects of taxation, and invariably generate a lot of paperwork. If family members are involved then you might find yourself under a high degree of pressure to take a course of action even though you may not be convinced it is the ‘right’ thing to do or, worse, is contrary to the rules of the trust. I have seen many a family wrought asunder by a conflict between trustees and beneficiaries.
Oh, and if you get any of that wrong, you will be personally liable to make good any loss to the trust. Did I mention you cannot charge for any of this?
In addition, family trustees are quite often afflicted by intra-family politics. If there is a patriarch or matriarch that asks you to be a trustee, it might cause a rift to refuse, and be worse still if you don’t run the trust exactly as they would like. This is an extremely common problem, but one that has potentially catastrophic outcomes for the poor lay trustee as this recent article on the STEP website makes clear.
Sadly, almost all the problems above played themselves out for Nicola Mackay leaving her facing a £1.6m tax bill. The case she brought (Mackay v Wesley, 2020 EWHC 1215 Ch) was to seek to have her appointment as trustee rescinded, on the grounds that she had trusted and been guided by her father in matters pertaining to the trust. Her father had sought to take the trust on a 'round the world' tax avoidance scheme, which necessitated the appointment of a new UK trustee. Although expressing great sympathy with her cause (as well they might, given that Nicola had recently miscarried and was still grieving the loss of her mother), the High Court rejected her application.
The take home advice here is to always take professional advice when you are taking on any legal role such as an executorship or trusteeship. If you are creating a trust, especially a large one, then very careful consideration must be given to your choice of trustees. Having at least one professional trustee (professional punchbag?) can often save a lot of legal and emotional fallout.
If you have any queries in relation to trusts or trusteeships, please do not hesitate to contact any member of our Wealth Management and Taxation Team.