TL;DR: A trustee is a person or trust company responsible for managing property or assets on behalf of a trust’s beneficiaries.

Definition

A trustee is a person or trust company responsible for managing property or assets for the benefit of others.

In some cases, the trustee manages a trust created during the lifetime of the person who created it. In others, the trustee manages a trust created in a Will, after the Will-maker has died.

The trustee is usually named in a legal document such as a Will or a Trust Deed. People can sometimes also be appointed as a trustee by a court.

Who can act as a trustee?

The following can act as trustee, if they qualify:

  • a capable adult person who has not declared bankruptcy
  • a trust company
  • the Public Guardian and Trustee

What does a trustee do?

The work of a trustee changes according to the terms of the trust. These requirements might be carefully written out in a legal document called a trust deed; they might be written in a letter or notes; they might also be inferred by a court if nothing was written down.

Trustees must also comply with the terms of BC’s Trustee Act, and, where necessary, with any obligations to the Public Guardian and Trustee’s office.

Why it matters

Trustees are entrusted with very important legal and fiduciary duties. They have an obligation to manage the assets in the trust according to the terms of the trust.

Other relevant words

Here are some other words that often get used along with the word trustee:

  • inter vivos trust: a trust set up during your lifetime, and meant to be used while you are alive
  • testamentary trust: a trust created in your Will, and meant to be used after you have died
  • alter ego trust: a special trust made by someone who is over 65 – this trust is created for tax and estate planning purposes
  • joint spousal trust, or joint partner trust: a special type of trust available to spouses or common-law partners 65 years of age or older, created for tax and estate planning purposes
  • bare trust: a special type of trust, usually restricted to real property, where someone is registered as an owner on title to the property, but they don’t really own their interest in the property – they are holding it in trust for others

Examples

Mary sets up a trust for her disabled child in her Will. Her executor acts as the trustee of this trusts and manages the funds for her disabled child during their lifetime.

Robert sets up a family trust during his lifetime and transfers assets into the trust. He does this for tax and estate planning purposes. He names his sister Joyce to be the trustee – the person who looks after the assets in the trust. When Robert dies, the trust deed says what happens to the assets in the trust.

Frequently asked questions

Is a trustee the same as an executor?

Sometimes, but not always.

A trustee manages the trust. If the trust is set up in a Will, then the executor is usually the trustee of that trust. Sometimes the will-maker names different people to carry out the roles of executor and trustee. For example, the will-maker might want their eldest child to wind up the estate, but hand off a portion of the estate to a trust company to manage for a disabled child.

When a person has been named as trustee of an inter vivos trust, they are simply called the trustee. Because the person who settled (or created) the trust is still alive, there is no executor yet.

Can a beneficiary also be a trustee?

Yes; it depends on the terms of the trust.

Can I refuse to act as a Trustee?

Yes, but renouncing your appointment as a Trustee must be done very carefully. Please contact a lawyer immediately to determine the steps you must take to renounce your appointment. You should not manage any part of the trust at all if you think you will renounce your appointment, but you need to make sure you deal with this immediately so someone else can take over and the trust property doesn’t get damaged or lost.

Can a trustee get paid?

Yes, the trustee is paid either according to the terms of the trust deed or agreement, to the terms of the Trustee Act, or by a court order. They can also be reimbursed for their expenses.

Here are some terms related to the word trustee: