Understanding the Role of Your Trustee Company
If you have set up a Trustee Company as the Trustee of your Trust you are normally both the directors and shareholders, it’s important to understand the distinct roles and responsibilities involved. A common misunderstanding is thinking that you, personally, are the Trustee, when in fact, it is the company that holds this role. Equally crucial is recognizing that the Trust itself is separate from the Trustee Company.
The Distinction Between You, the Trustee Company, and the Trust
When you established your Trustee Company, you created a legal entity distinct from yourself. This company is the Trustee, meaning it is the company that holds and manages the Trust assets on behalf of the beneficiaries. Your role as a director and shareholder gives you control over the company, but the Trustee’s obligations are carried out by the company itself.
Why This Matters:
Understanding this separation is vital for proper management and decision-making. Here’s why:
1. Legal Responsibility: The company, not you personally, is responsible for managing the Trust’s assets according to the terms of the Trust Deed. This protects you from personal liability, as long as the company acts within its powers and duties.
2. Asset Protection: The assets of the Trust held in the name of the Trustee Company, not by you as an individual. This structure provides an additional layer of protection, as the Trust’s assets are kept separate from your assets.
3. Continuity and Stability: Because the Trustee Company is a separate entity, it ensures continuity in the management of the Trust. The company doesn’t die, become incapacitated, or resign—this provides long-term stability for the Trust’s assets and beneficiaries.
4. Simplified Administration: Operating a Trustee Company often involves minimal administration, as it does not require a bank account or taxation returns. This simplicity can make managing the Trust more straightforward, while still providing the necessary legal protections.
Moving Forward with Confidence:
If you find yourself uncertain about the role of your Trustee Company or how it interacts with your Trust, it might be time to revisit your understanding and ensure everything is set up correctly. At Ross Holmes Virtual Lawyers, we can provide guidance and support to help you navigate these complexities with confidence.
Remember, the separation between you, the Trustee Company, and the Trust is key to effective management and protection of your assets. Get in touch with us if you need assistance or have any questions about your Trustee Company.
