Administering trusts & estates

Administering a Trust

Charities are required to take steps to protect and maximise the legacies left to them, and as such, as when they are beneficiaries of a Will, they need certain documents when they are the beneficiaries of a Trust.

This includes the annual trust accounts to enable them to see how the trust assets are being managed and to monitor the value for long term financial planning.

During the administration of a trust, charities require the following documentation:

  • a copy of either the Trust Deed or the Will setting out the Trust
  • a copy of the estate accounts.
  • a copy of the annual trust accounts

Where the trust asset is a property, they are usually grateful for confirmation that the property is insured and reasonably maintained. Many charities are able to assist the trustees with this if there are no arrangements in place.

Where there is a trust fund or investment portfolio charities would appreciate receiving a copy of the trustees’ investment policy and an annual copy of the portfolio valuation (these should be provided by the client’s investment advisor).

It is worth noting that many charities have relationships with IFA’s who charge reasonable rates when instructed by the charity and are experienced in investing trust funds for these charities. Please contact the charitable beneficiary directly to see if this is the case.


Administering an estate

There are a number of different documents that are required by charities when administering an estate.

Practice varies as to whether a copy of the Will should be provided before probate has been granted, but provision at an early stage is appreciated on the understanding that it remains confidential until probate.

The documents that are required by charities after probate are as follows:

Pecuniary legacy – the name and address of the deceased, the date of death, the amount of the legacy and a copy of the clause containing the legacy in the Will;

Specific legacy – the name and address of the deceased, the date of death, a description of the legacy and a copy of the clause containing the legacy in the Will;

Residuary legacy –

  • a photocopy of the Will and any codicils
  • a schedule of assets and liabilities (or copy of the HM Inland Revenue Account)
  • valuations of significant assets, such as property or an investment portfolio
  • a copy of the estate accounts – this is a requirement under law for any beneficiary who requests them and the Charity Commission requires charities to request these where they benefit from the residue of an estate
  • a statement of estate income Form R185 (Estate Income).

If a legacy is not paid within the executor’s year, beneficiaries are entitled to statutory interest as part of their legacy. Interest runs from the first anniversary of death. From July 2003, interest is payable at the basic rate of funds in court

If there are a number of charity residuary beneficiaries named in a Will, most of the larger charities will be prepared to act as the lead charity in co-ordinating a common view (as far as possible) or simply acting as postman. Generally, the first-named charity will undertake the task if requested.