The duties of trustees of a charitable trust are contained in the trust deed, Trustees Act 1956, Charitable Trusts Act 1957 and Charities Act 2005. The duties continue until the trustee resigns, although in certain circumstances they can continue after resignation.
The primary duties of a trustee are to:
- comply with the terms of the trust deed that created the trust;
- act honestly and loyally; and
- act in the best interests of the trust.
Additionally, all trustees have an obligation to:
- treat the trust’s potential beneficiaries impartially;
- ensure proper accounts are kept;
- exercise care, skill and prudence when carrying out duties as a trustee;
- actively advance the charitable purposes of the trust (this means that the trustees must act in a way you honestly believe will advance, and not harm, the trust’s charitable purposes);
- take reasonable steps to ensure that they have the skills and knowledge required to guide and monitor the management of the trust;
- exercise their powers themselves (they will not be able to delegate their duties to third parties unless specifically permitted to do so by the trust deed); and
- ensure that any payments by the trust are made to the correct beneficiary (if a beneficiary is overpaid, it is possible that they will be personally liable to account to the trust for the overpayment).