- 14 April 2026
Trustee duties: reviewing where trust money is held
Trustees have a legal duty to act in the best interests of beneficiaries, including regularly reviewing where trust money is held. This is not just a good housekeeping exercise – it's a core part of prudent financial management, risk control, and compliance with trustee obligations.
Why is it important to review where trust money is held?
Trustees are responsible for safeguarding trust assets. This includes ensuring that funds are held in appropriate accounts or investments that align with the trust’s purpose and risk profile.
Regular reviews help trustees to:
- Ensure funds remain secure and protected
- Check that financial institutions are stable and reputable
- Confirm that accounts are correctly titled in the name of the trust
- Assess whether the current arrangements still meet the needs of beneficiaries
- Identify opportunities for better interest rates or investment returns
- Remain compliant with legal and regulatory requirements
Failing to review where money is held could expose the trust to unnecessary risk or missed opportunities.
Where can trust money be held?
Trust funds can be held in a variety of places depending on the type and purpose of the trust. Common examples include:
- Trustee bank accounts
- Savings accounts or fixed term deposits
- Investment portfolios
- Cash management platforms
- Specialist trust accounts
Each option carries different levels of risk, return, and accessibility. Trustees should understand the purpose of each holding and how it fits into the overall trust strategy.
Key factors to consider during a review
When reviewing where trust money is held, trustees should take a structured approach. Key considerations include:
Security of funds
Check the financial strength and reputation of the institution holding the funds. Consider whether deposits are protected under relevant compensation schemes and whether diversification is needed to reduce risk.
Account ownership and naming
Ensure all accounts are clearly designated in the name of the trustees or the trust. This helps avoid disputes and ensures legal clarity.
Interest rates and returns
Compare current rates with those available in the market. Low interest rates may erode the real value of cash holdings over time, particularly during periods of inflation.
Accessibility and liquidity
Consider whether funds can be accessed when needed. Some trusts require quick access to cash for distributions, while others can lock funds away for longer periods.
Costs and fees
Review any account charges, platform fees, or investment management costs. These can reduce overall returns if not carefully managed.
Alignment with trust objectives
Ensure the way funds are held aligns with the trust deed and the needs of beneficiaries. For example, a trust set up for long term growth may require a different approach than one designed for income distribution.
How often should trustees review holdings?
There is no fixed rule, but as a general guide:
- Carry out a full review at least once a year
- Review more frequently during periods of economic uncertainty
- Reassess after any major change in the trust or beneficiary circumstances
Documenting the review process is essential. Keeping clear records demonstrates that trustees are actively fulfilling their duties.
Practical steps for trustees
To carry out an effective review, trustees can follow these steps:
- List all accounts and investments held by the trust
- Gather up to date statements and performance data
- Compare current arrangements with market alternatives
- Assess risks, returns, and suitability
- Seek professional advice if needed
- Document decisions and reasons
This structured approach helps ensure consistency and accountability.
Common mistakes to avoid
Trustees should be aware of common pitfalls, including:
- Leaving large sums in low interest accounts for long periods
- Failing to diversify holdings across institutions
- Overlooking changes in financial institution stability
- Not updating account names after trustee changes
- Neglecting to record review decisions
- Avoiding these issues can significantly improve trust governance and financial outcomes.
Get expert advice today
Reviewing where trust money is held is a fundamental trustee duty. It supports good governance, protects assets, and helps ensure the trust continues to meet its objectives.
By carrying out regular, well documented reviews, trustees can demonstrate diligence, reduce risk, and act in the best interests of beneficiaries. In a changing financial environment, staying proactive is key to effective trust management.
If you need any help opening a trustee account or reviewing your trust investments, we’re here to help. We’re backed by 20+ years of award-winning financial advice and we’re at your disposal.