Are you ready for new trustee obligations?

The Trusts Act 2019, which codifies existing trust law and imposes additional obligations on trustees, comes into effect on 30 January 2021.

If you are a trustee of a family trust you need to ensure that you have had advice on how to comply with the Act and the effect it may have on your trust.

Some of the more important matters to be aware of are:

• Trustees must have regard to the context and objectives of the trust – making letters of wishes and other original trust documents very important.
• Trustees must keep copies of all “core documents” (being all documents relating to the trust for the whole lifetime of the trust), and all trustees must hold copies of at least the trust deed and any variation of trust deed.
• There is a presumption that trustees must notify “basic trust information” to every beneficiary, including all discretionary beneficiaries. “Basic trust information” is that the person is a beneficiary, the name and contact details of the trustees, ongoing changes to trustees and that the beneficiary has the right to request a copy of the trust deed and trust information. Before deciding what information to release, trustees must exercise their judgement as to a number of factors set out in the Act. This will require trustees to be proactive and to make some careful decisions.

We are finding in practice that many trustees wish to wind up their trusts, vary them or resettle them on newer, modern trusts that are a better fit with the new Act.  If you have heard from us in relation to reviewing your trust but haven’t yet responded, we recommend that you touch base with us as soon as possible so that you can ensure that your trust is compliant before the deadline of 30 January 2021.

The Act also applies, but to a more limited extent, to charitable trusts.  If you are a trustee of a charitable trust, we therefore recommend that you contact us to arrange a review of your charitable trust deed to ensure that it is compliant with the new Act.