If you have agreed to act as a trustee, there are some very strict obligations that you have to comply with.You must:
One of the duties we have highlighted above is the duty to “be diligent and prudent in carrying out your duties”. A recent reminder of this has come in the form of “sum insured” insurance.
Most trustees of trusts that own a house will by now have had to update their insurance from “total replacement” to “sum insured”. The practice seems to have been that insurers have suggested a sum, and anecdotally it appears that most homeowners are simply accepting that sum.
However, what would the “prudent and diligent” trustee homeowner do?
At the barest minimum, trustees should undertake a “Cordell” calculation, using a comprehensive online calculator that gives an estimate of the cost to rebuild a home. These, however, will not take into account vagaries of a particular site. It is therefore prudent to consider engaging a Valuer or Quantity Surveyor who will produce an accurate estimate of the cost of rebuilding a particular property, including the costs of demolition/removal, clearing and preparing the site, council and architect’s fees, service, and building costs.
If this seems a bit “over the top”, remember that the standard is not “what would I do”, but “what would someone who is careful and cautious do”.
The “core duties” of a trustee are not currently set out in any one document, though the Law Commission has suggested in its recent report that they ought to be.
You can also download a copy of our trust booklet.
If you have any queries about your role as a trustee, please contact one of our trust specialists.