Becoming a trustee of a charitable trust

Becoming a trustee of a charitable trust

Becoming a trustee of a charitable trust

Is the purpose of the trust worthy of your time and effort?

It can be gratifying to be asked to act as a trustee of a charitable trust. However, before you accept such an offer it is worthwhile to consider not only the details of what will be required of you as a trustee, but also the nature of the trust itself.

There are over 25,000 charities registered with Charities Services in New Zealand. Most of these organisations operate as charitable trusts. Whatever their size, charitable trusts are dependent upon the energy and commitment of their trustees.

The purpose of this article is to outline some of the issues you need to think about if you are asked to become a trustee of a charitable trust. As a minimum, you need to consider:

  • the legal duties you will take on as a trustee;
  • your investment obligations;
  • how the trust is governed;
    your potential liabilities as a trustee; and
  • whether the purpose of the trust is worthy of your time and effort.

The legal duties of trustees

Trustees of all trusts (including charitable trusts) are subject to a wide range of legal duties. These duties are created by the trust deed which govern the trust and by the general law relating to trusts. These duties continue for any trustee until they resign, although in certain circumstances, they can continue even after resignation.

The primary duties of a trustee are to:

  • comply with the terms of the trust deed that created the trust;
  • act honestly and loyally; and
  • act in the best interests of the trust.

If you are considering becoming a trustee of a charitable trust, you should begin by familiarising yourself with the terms of the trust’s deed. The deed will set out your powers and obligations as a trustee.

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