When was the last time you took a moment to consider the well-being of your Family Trust? Establishing a family trust is only the first step; ongoing care is crucial for its success. There’s a lot more to maintaining a family trust than many realize, and overlooking key aspects can lead to challenges, especially in legal contexts.

Family trusts are increasingly facing legal challenges due to inadequate administration by trustees. Improperly managed trusts can be deemed an ‘alter ego,’ ‘sham,’ or ‘illusory’ trust by the courts, making trust assets vulnerable to creditors.

As a trustee, it is your responsibility to fulfill various duties, including holding an annual trustees meeting to review the family trust’s status. This meeting is essential to uphold the trust’s integrity.

Consider these essential agenda items for your annual trustees meeting:

1. Trust Relevance:

   • Assess the ongoing relevance of the trust.

2. Trust Deed Review:

   • Review the trust deed to ensure it aligns with the trust‘s needs and objectives.

3. Review the Trust Assets:

   • Take stock of the trust’s assets.
   • Ensure proper recording of asset acquisitions and dispositions.
   • Verify correct ownership records.
   • Assess advancements made to the trust, distinguishing between gifts and loans.
   • Confirm adequate insurance coverage for all trust assets.

4. Review Trust Debts:

   • Examine current outstanding debt balances.
   • Ensure accurate recording of debt terms.
   • Evaluate the appropriateness of debt forgiveness.

5. Review Trust Records:

   • Confirm secure storage of trust records in an accessible location.
   • Verify recording of all trust decisions in resolutions or minutes.

6. Review Trust’s Financials:

   • Assess the trust’s solvency.
   • Confirm that trust-related payments are made from a separate account.
   • Review bank statements, investment reports, financial statements, tax returns, etc.
   • Check for the preparation of financial statements and filing of income tax returns.

7. Consideration of Beneficiaries:

   • Evaluate the circumstances, needs, and any disabilities of each beneficiary.
   • Record distributions made to beneficiaries or planned post-meeting.

If managing your family trust seems overwhelming, Corelegal offers a Trust Administration Support service. For more details or assistance with any family trust concerns, feel free to give us a call. Proactive administration is key to safeguarding your family’s assets now and in the future.