custodian trustee

England, Wales

Not to be confused with a custodian, a custodian trustee is a trustee who has the limited function of holding trust property. The trust property is vested in the custodian trustee (meaning that the legal title to the property is registered in the custodian trustee's name), who has custody and care of it. The custodian does not, however, manage the trust property.

The term "custodian trustee" was introduced by section 4 of the Public Trustee Act 1906. The Public Trustee and other bodies authorised by the rules made under the Public Trustee Act 1906 (the Public Trustee Rules 1912, as amended) are eligible to be appointed as a custodian trustee of a trust. For example, a corporation which meets all the following requirements may be appointed as custodian trustee:

• Constituted under UK (or EEC) law.

• Empowered by its constitution to undertake trust business in England and Wales.

• Has one or more places of business in the UK.

• Is a company registered in the UK (or in the EEC) and has share capital of at least £250,000, of which not less than £100,000 has been paid up.

(Rule 30, Public Trustee Rules 1912.)

A custodian trustee is usually appointed by a charity that is constituted either as a trust or as an unincorporated association. This is because, unlike companies, trusts and unincorporated associations do not have a separate legal identity and so cannot enter into contracts or sign documents in their own name. The custodian trustee performs this function and must carry out the (lawful) instructions of the charity trustees.