A trustee is responsible for looking after assets on behalf of another. In such a role the must perform their duties to ensure that all steps are taken in the beneficiary’s best interests. If a trustee acts in breach of their duties they may find themselves personally liable to the beneficiaries.
Taking an entirely dishonest approach, a trustee in Newcastle has recently been jailed for eight months for spending more than £30,000 of her niece’s inheritance for her own benefit.
The Sunderland Echo has reported how Mrs Walker was appointed as a sole trustee of her brother’s’ estate after he died suddenly. He had indicated that his estate was to be left in trust for his daughter Charlotte, who was 19 at the time, until she reached 21 years of age.
However, Mrs Walker spent £34,147 within months of the start of her role as trustee. At the outset of the investigation Mrs Walker apparently had indicated to police that she had believed that she was entitled to spend some of the money, believing that her brother had made provision for herself and her mother.
During the Sentencing, Recorder Jonathan Bennett said: “You were executor, you were holding the money on trust until your niece was 21.
“You chose then to go and use this money for a whole variety of purposes. Within a day or so of you getting this sum, in excess of £30,000, the first thing you were doing was not paying off loans and so forth or doing house repairs on your mother’s house, but going to Asda and spending £3,000 on various electrical items.”
The case highlights the importance of your choice of trustees when setting up a trust in your lifetime or under your will, to ensure that an individual with the appropriate characteristics – such as honesty and willingness to want the best for the beneficiary – is appointed.
If you would like further advice in setting up a trust or assistance in performing the role of trustee, please contact Helen Kelly or Sarah Goodwin in our trusts team on 0161 475 7689.