Withers Worldwide

While every trust is different, there are a number of common risks which lead to tension and possible litigation against fiduciaries. Central to minimising risk in the course of trust management will be ensuring that there are systems in place to review and report on developments affecting the trust. A trustee who fails to respond to such changes could expose himself and the trust assets to unforeseen risks.

• What systems are in place to alert the fiduciary to changes (or impending changes) in circumstances including:
  - Death of settlor/dominant beneficiary/key player in the family businesses
  - Change of circumstances of beneficiaries or fiduciaries which might impact on tax position 
  - Breakdown of family relationships including divorce (or impending divorce)
  - Births, attainment of majority and marriages of beneficiaries 
  - Sale of significant trust assets 
  - Significant change in family businesses
  - Intimation of adverse claims to the trust assets
  - Relevant legislative or treaty change
  - Political change or major market shift.
• How quickly and what review is then carried out?
• What systems are in place to trigger requirement to secure legal or other specialist advice?
• What systems are in place to check that any proposed steps are within the fiduciaries' powers?
• What, if any, plan is in place for consultation with beneficiaries and specialist advice should they become inappropriate to retain? N.B. This may require consultation with the beneficiaries.

Withers Contentious Trust team regularly advises clients on the record-keeping and reporting systems to ensure that trustees are able to supervise their trusts effectively. We also help to trustees respond to the changing reality of the trusts under their control, advising on rectification, variation and extension of trustee powers.