Roles and Responsibilities of a Trustee Appointed Under a Will
For a minor child or a specially abled adult. The following Roles and Responsibilities of the Trustee shall apply and form an integral part of this WILL.
01
About the Trustee Under a Will
A trustee appointed under a will holds the property left for the beneficiary and manages it for their benefit. The trust takes effect on the testator's death, and the law is the Indian Trusts Act, 1882, read with the will and the Indian Succession Act, 1925.
The legal title to the property is held by the trustee, and the benefit belongs to the beneficiary. The trustee is not the owner and cannot use the property for personal gain.
The trustee is different from the guardian and the executor. The guardian looks after the person, the executor administers the estate and hands over the property, and the trustee holds and manages it afterwards. One person can be named for more than one role, but it is safer to keep the guardian and the trustee separate.
Any person capable of holding property can be a trustee. Where the trustee has to exercise discretion, as in a trust for a specially abled adult, the trustee must also be competent to contract.
A trustee can accept or disclaim the trust. Once the trustee has accepted, the trustee is bound by the duties of the office and cannot give up the trust except as the will or the law allows.
02
General Roles and Responsibilities of the Trustee
Carries out the purpose of the trust and obeys the directions in the will.
Takes charge of the trust property after the executor hands it over, and prepares an inventory of the property, the title documents and the bank and investment records.
Acquaints himself with the nature and condition of the trust property as soon as possible after accepting the trust.
Protects the title to the property, collects what is due to the trust, takes reasonable steps to defend it in a dispute, and does not set up a title adverse to the beneficiary.
Deals with the trust property with the care that a person of ordinary prudence takes of his own property.
Invests the money as the will directs, or as the Act permits where the will is silent, and does not make risky investments. Where the property is perishable or wasting, converts it into a permanent and profitable form.
Keeps the trust property separate from his own and holds it in a separate trust bank account and investment account.
Is impartial between beneficiaries where there are several, such as a beneficiary for life and a beneficiary after.
Does not make a personal profit from the trust, does not buy the trust property, and takes no remuneration unless the will allows it.
Does not delegate the duties of the trust to another person unless the will, the law or ordinary business practice allows it. Co-trustees act together.
Keeps clear and accurate accounts of the trust property, and at reasonable times gives the beneficiary (or the guardian for the beneficiary) full information on the amount and state of the property.
Files the income tax returns and pays the taxes of the trust, and keeps the records.
When the trust ends, hands over the property to the person entitled, settles the accounts and obtains an acknowledgment that nothing is due.
03
Additional Responsibilities Where the Beneficiary Is a Minor Child
Uses the income and, where the will allows, the capital for the child's maintenance, education, health and general welfare.
Pays school fees, medical bills and similar costs directly to the school or provider wherever possible. For day-to-day expenses, gives the guardian only what is needed and keeps receipts.
Works with the guardian, who looks after the child's person, and does not take over the guardian's role of care.
Holds the property until the age stated in the will, which can be 18 or later. A minor cannot give a valid discharge, so the trustee does not hand over the property or capital to the minor.
Sells, mortgages or leases the child's immovable property only if the will gives the power or the law permits. Where in doubt, applies to the court for directions to protect both the child and the trustee.
On the child reaching the stated age, gives a full account and transfers the property.
If the child dies before the property vests, deals with it as the will directs for that case.
For a specially abled child, continues the trust after the age of 18 if the will says so, so that the property stays protected after the guardianship of the minor ends.
04
Additional Responsibilities Where the Beneficiary Is a Specially Abled Adult
Holds the property for the adult's lifetime where the will says so, and does not give it outright to the adult unless the will requires it.
Uses the income and capital for the adult's care, including medical treatment, therapy, housing, attendant or support staff, education or training, and daily living expenses.
Uses the discretion the will gives with the adult's welfare as the first consideration, and consults the adult and the guardian before decisions that affect them.
Pays hospitals, caregivers, institutions and other service providers directly where possible, and makes a regular allowance for the adult's ordinary needs.
Works with the guardian appointed by the Local Level Committee, or the District Court or designated authority, who looks after the person. The trustee does not replace the guardian and does not act as the legal guardian unless appointed as one.
Respects the adult's legal capacity and dignity. The adult is the beneficiary and is entitled to the benefit of the property.
Arranges medical insurance and protects the adult's pension and scheme benefits, and keeps their documents and records safe.
Reviews the adult's needs every year, and informs the guardian or the authority if the adult appears to be neglected or exploited.
Appoints or helps in finding a successor trustee, so that the trust is not left without a trustee.
On the adult's death, pays the funeral and last expenses, settles the accounts and hands over the remaining property to the persons named in the will.
05
Rights of the Trustee
To be reimbursed from the trust property for expenses properly incurred in managing the trust.
To apply to the court for directions on a doubtful question about the trust, such as selling the property or the meaning of a clause.
To hold the title documents and to be paid remuneration only if the will provides for it.
To settle the accounts and receive a discharge when the trust is completed.
06
Liability and Removal of the Trustee
A trustee who commits a breach of trust is personally liable to make good the loss caused to the trust property.
The beneficiary, or the guardian acting for the beneficiary, can approach the court to enforce the trust.
The court can remove a trustee for misconduct, misuse of the property or failure to do the duties, and can appoint a new trustee.
A trustee who has taken reasonable care of the property is not responsible for a loss that happens despite that care.
07
What the Will Should Say About the Trustee
Name of the trustee, a successor trustee and, where wanted, a second trustee to check the first.
The property that is to go into the trust and the purpose of the trust.
How the income and the capital are to be used, and whether the trustee has discretion.
The age at which the minor receives the property, or the statement that an adult's trust will continue for life.
The trustee's powers of investment, sale, mortgage and lease.
How often the trustee gives accounts, and to whom.
Remuneration of the trustee, if any, and reimbursement of expenses.
What happens to the property when the trust ends or the beneficiary dies.
