Trustees' have the following duties.............

1. Trustees must take care to act in accordance with the Trust Deed and to protect the charity’s assets. They are also responsible for the compliance with the Charities Act and should note the particular requirements of the Acts in relation to land transactions.

2. Trustees should not make a private profit from their position. They cannot receive remuneration without the sanction of the Charity Commission. They must also perform their duties with the standard of care which an ordinary, prudent business person would show. Higher standards are required of professionals and in relation to investment matters.

3. Charitable trustees must ensure that the information relating t the charity and trustees is registered with the Charity Commissioners and that annual accounts, reports and returns are completed and sent.

4. If charitable income exceeds £10,000 the letters, adverts, cheques etc must bear a statement that the organisation is a registered charity.

5. Trustees are under a duty to ensure compliance with all relevant legislation (e.g. in relation to tax and land matters).

Trustees’ Personal Liabilities

1. If in doubt always consult the Charity Commissioners. A trustee who does so can avoid personal liability for breach of trust if he/she acts in accordance with the advice given.

2. Generally, a trustee incurs personal liability if he/she:-

• Acts outside of the scope of the Trust Deed
• Falls below the required standard of care
• Acts otherwise than in the best interests of the charity, in a way that causes lost to the charity’s funds
• Makes a personal profit from the trust assets

3. Trustees of a trust can be liable personally to third parties because, unlike a company, a trust has no separate identify from the trustees. The constitution will normally provide for trustees to be given an indemnity from the trust assets, provided that they act properly in incurring the liability.

4. Trustees remain personally liable for their own acts and defaults once they have retired. If they have entered into any ongoing contracts on behalf of the trust they should see an indemnity from their successors.
5. If the charity is a company, the trustees will be protected from liabilities incurred in the day to day running of the charity in the normal course (the trustees for the time being will be responsible) but will be personally liable if they commit a breach of trust (see 2 above).

6. Trustees may be liable to fines if they do not comply with the duty to make returns etc.

Indemnities

An indemnity can be given from the trust fund provided the trustee has acted properly and within his/her powers. Trustees may take out insurance to protect themselves against personal liability but not for criminal acts, fraud etc. There will be no problem if the trustees themselves pay the premium but if they are paid out of the charitable funds trustees will need the consent of the Charity Commissioners first unless the trust deed allows it.