For some of us the closest we get to the excitement of an Oscar Nomination is being nominated to be a friend’s Trustee. But what exactly is a Trustee and can you get away with doing nothing more than signing a few forms every now and then?
Well, like anything in life, there’s always a tiny chance that you’ll get away with being a slacker but legally speaking being a Trustee comes with some chunky responsibilities and can put your own cash at risk if things go bad. This recently happened to a highly skilled Auckland Accountant so there’s no reason it won’t happen to you and walking on the knife-edge might just lose its thrill when you realise that Trusts can live for 80 years.
With that in mind, here’s some insider tips on a few simple things you can do to protect yourself as a Trustee:
- Don’t sign a bank loan agreement unless it has a Trustee limitation clause.
Don’t be a Trustee in your own name. Use a company instead (Corporate Trustee or Trustee Company).
Prepare annual accounts for your Trustee company and file tax returns every year even if they’re Nil.
Setup regular meetings with the other Trustees, write down what you discuss and then have each Trustee sign the Minutes showing that you’re protecting the Trust assets for the beneficiaries. (The beneficiaries are the people that’ll sue you if things go bad and even though they might be angelic little kids it doesn’t mean that they won’t turn into aggressive dogs in Court twenty years from now).
Make sure no one is are taking money out of the Trust without all the Trustees formally agreeing first because Trust bank accounts aren’t for living out of. Using Trust EFTPOS cards for regular swipes at the grocery store or gas station is a huge No No.
Regularly check and record that the Trust investments are prudent and agree with your investment strategy.
This is only the tip of the iceberg so if you’d like to know a bit more about your Trustee responsibilities then let us know. We’re here to make your life easier and will relieve the pressure by taking care of your Trust annual accounts, tax returns and resolutions. If you’re worried that your Trust records aren’t up to scratch then we’re happy to check everything over with our comprehensive Trust-Administration-Review ($250) or if you need a professional Chartered Accountant to get the job done right then we can step in as your Corporate Trustee for a worry free price of $700 a year.
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