Understanding the Role of a Trustee in Singapore Estate Planning

trustee plays a critical legal role that ensures assets are managed and distributed according to the terms set out in a trust instrument or will

Introduction

When it comes to estate planning in Singapore, the concept of a trustee is a critical legal role that ensures assets are managed and distributed according to the terms set out in a trust instrument or will. Appointing the right trustee is essential in safeguarding beneficiaries’ interests—especially when minors, vulnerable dependants, or complex assets are involved.

This article explores the fiduciary duties, legal responsibilities, and practical considerations involved in appointing and acting as a trustee under Singapore law.

1. What is a Trustee?

A trustee is an individual or legal entity appointed to hold and manage property or assets on behalf of another person or group of people (the beneficiaries) in accordance with the terms of a trust deed, testamentary trust, or will. In Singapore, trusts are governed by the Trustees Act 1967, which sets out the powers and duties of trustees.

Trustees can be appointed in various scenarios, such as:

• Testamentary trusts created under a will (e.g., for minor children)

• Standby trusts activated upon incapacity or death

• Living or inter vivos trusts established during the settlor’s lifetime

2. Duties and Responsibilities of a Trustee

Trustees owe a fiduciary duty to act in the best interests of the beneficiaries and must exercise reasonable care and diligence in the management of trust assets. Their responsibilities include:

• Administering the trust in accordance with the terms of the trust instrument

• Preserving and managing trust property, including investment decisions

• Keeping proper records and accounts

• Distributing assets or income to beneficiaries as stipulated

• Avoiding conflicts of interest or self-dealing

• Complying with relevant statutory obligations, such as tax reporting or regulatory filings

Failure to fulfil these duties can result in the trustee being personally liable for breach of trust.

3. Who Can Be a Trustee in Singapore?

In Singapore, any person of sound mind and at least 21 years of age can be appointed as a trustee. Trustees can be:

• Individuals (family members, friends, or trusted advisors)

• Professional trustees (law firms, trust companies)

• Corporate entities (licensed trust service providers regulated by the Monetary Authority of Singapore under the Trust Companies Act)

It is essential to choose someone who is not only trustworthy but also capable of understanding their legal obligations and managing the trust assets competently.

4. Trustee Powers and Limitations

Under the Trustees Act, trustees are given statutory powers to:

• Sell, lease, or mortgage trust property

• Invest trust funds in authorised investments

• Insure trust assets

• Appoint agents, nominees, or custodians

However, trustees must always act within the scope of the powers granted in the trust instrument and must not act ultra vires (beyond their legal authority).

Some trusts may include specific restrictions, such as requiring unanimous agreement for certain decisions or prohibiting particular investments. Trustees must review the trust deed carefully before acting.

5. Trustee Liability and Indemnity

Trustees who breach their duties may be held personally liable for any losses suffered by the trust or beneficiaries. Common breaches include:

• Mismanagement of assets

• Acting in conflict of interest

• Distributing to the wrong beneficiaries

To mitigate risk, many trust instruments include indemnity clauses, and trustees may obtain trustee liability insurance. However, indemnities typically do not cover wilful default or gross negligence.

6. Trustee Remuneration

Unless the trust deed provides otherwise, non-professional trustees are generally not entitled to remuneration, but may be reimbursed for reasonable expenses incurred. Professional trustees may charge fees as agreed with the settlor or as stipulated in the trust deed.

7. Removing or Replacing a Trustee

Trustees may be removed or replaced in the following ways:

• As stipulated in the trust deed (e.g. through a power of appointment)

• By court order under the Trustees Act, where there is misconduct or incapacity

• Voluntarily, if a trustee resigns and a replacement is appointed

It is advisable to include a successor trustee clause in the trust to ensure continuity in the event of resignation, incapacity, or death of a trustee.

Conclusion

Trustees play an indispensable role in ensuring that your estate plan is executed faithfully and responsibly. Given the legal complexities and fiduciary duties involved, the appointment of a suitable trustee should be done with careful thought and, where necessary, professional advice.

At Stamford Legacy, we guide clients through trust establishment, trustee appointments, and long-term wealth preservation strategies that comply with Singapore’s legal framework. Whether you are setting up a trust or considering acting as a trustee, we’re here to provide clarity and counsel every step of the way.

📞 Contact our team today to learn more about trustee roles and trust structuring options.

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