Duties, Responsibilities, and Legal Framework
Navigating the intricate world of trust management can seem daunting, with the role of a trustee being one of the most critical yet often misunderstood positions. Acting as a trustee carries significant responsibilities, along with stringent legal and ethical obligations. In this post, we aim to shed light on this crucial role, discussing the primary responsibilities of a trustee and the pertinent legislation that governs their actions.
Understanding the Trustee Role
At its core, a trustee carries a fiduciary duty to the trust’s beneficiary. This responsibility requires the trustee to act solely in the best interests of the beneficiary. They are obligated to act in good faith, with due diligence and the care that a prudent professional would exercise when managing others’ affairs. Importantly, this standard is not that of an average person but of an individual possessing relevant professional skills. Recognising this distinction is critical when considering the trustee role.
Legislation Governing Trustees: A South Australia Perspective
In South Australia, a trustee’s conduct is dictated by specific legislation, primarily the Trustee Act 1936 and the Aged and Infirm Persons’ Property Act 1940. The latter mainly applies to situations where a trustee manages an estate due to the beneficiary’s incapacity.
These Acts provide a comprehensive guide to a trustee’s role, outlining their duties and crucially, the boundaries of their powers. They help clarify what actions a trustee can undertake with the estate.
For instance, the Trustee Act 1936 provides directions for investment of monies, power to call on shares, purchasing a property for the beneficiary’s residence, retaining investments, and conditions for property sales.
On the other hand, the Aged and Infirm Persons’ Property Act specifies the Manager’s (a role akin to a trustee) powers concerning a protected estate. These powers range from recovering possession of the estate, managing repairs and insurance, recovering payable monies, carrying on business partnerships, to managing probate or administration grants.
The Act also mandates the Manager to apply monies for the maintenance of the protected person and their immediate family. While the term “maintenance” covers basic needs, a court order is required for expenditures beyond the basics.
Trustees should consult these acts directly and seek legal advice for clarification. Trustees are required to submit annual reports to the Court and The Public Trustee. Accurate accounting is critical, and failure in this regard could result in a breach of fiduciary duty.
Supporting Your Trustee Journey
The trustee’s role is undeniably complex, subject to meticulous scrutiny and stringent compliance measures. After all, trustees oversee the affairs of another individual, with no room for personal gain or interest.
If you’re a trustee seeking guidance on your obligations or a beneficiary concerned about a trustee’s actions, our expert team is here to help. We are committed to demystifying trust management and ensuring you navigate your responsibilities confidently and efficiently. Trust management need not be overwhelming, and with the right guidance, you can ensure a successful trustee journey.
Contact us today to learn how we can assist you. To get in touch you can connect with us on (03) 8691 3111 or send us an email at hello@alliedlegal.com.au.
