Trusts Act – What Trustees should do now! articles
28 Jan 2021
30 January 2021: The Trusts Act comes into force on 30 January 2021. This new Act significantly increases the obligations and duties of trustees – and beneficiaries have enhanced rights!
Beneficiary Rights: Beneficiaries are entitled to require that trustees operate and administer the trust in accordance with the terms of the trust and for the benefit of the beneficiaries. The Act strongly reinforces these benefiaciry rights against trustees.
Trustee Obligations: Trustees should be concerned about:
- Their understanding of the trust – trustees are required to be familiar with the trust terms and the affairs of the trust.
- Their right to be indemnified by the trust – the Trusts Act has new requirements.
- Trustee beneficiaries – the trust deed needs to specifically permit a trustee beneficiary to make trust decisions and to profit or take any benefit from the trust.
- Trustee remuneration – any trustee who expects to be paid or reimbursed for being a trustee or for acting for the trust needs to ensure that the trust deed specifically permits this to happen.
- Information disclosure to beneficiaries: trustees must make available to every beneficiary information about the trust – the existence of the trust, who are the beneficiaries, the name and contact details of trustees and the right of beneficiaries to request a copy of the terms of the trust and other trust information (trust assets and dealings etc.).
Check Your Trust Deed Now: all trust deeds are different so you need to check – don’t assume everything is covered. You need to know what your trust deed covers and that the requirements of the Trusts Act, such as the above, can be meet.
At Stace Hammond we are conducting reviews of trusts with clients for these purposes. If you think it is time to review your trust, please get in touch!