December 2020

On 30 January 2021, the Trusts Act 2019 comes into force.

One of the most significant changes in the Act is a presumption that trustees of a trust will advise each adult beneficiary:

• that they are a beneficiary;
• details of the trustees; and
• that they have the right to request trust information (such as the trust deed and financial statements) from the trustees.

If the trust has any beneficiaries who are under 18, this information should be given to their representative (e.g. parent or guardian).

There are certain factors trustees are obliged to consider when deciding whether this presumption will apply, including the age and circumstances of each beneficiary and the effect of disclosure on a beneficiary or the trustees.

Accordingly, trustees should:

1. Hold a list of all beneficiaries of the trust, including their contact details (and, in the case of beneficiaries who are children, their parents or guardians contact details).
2. Meet to decide whether the presumption should apply for each beneficiary, or whether information should be withheld.
3. In the absence of a collective decision to withhold information, write to each beneficiary providing the above information.
4. Ensure the trustees maintain a statement of assets, liabilities, income, and expenditure (usually in the form of financial statements prepared by the trust’s accountant).
5. Seek advice from the trust’s lawyer regarding the implications of the Act.

The Act creates a good opportunity for trustees to reflect on the suitability of the trust structure, and to consider the implications of the Act on the trust and its beneficiaries. Many trusts are currently being wound up, and others are being varied to change the terms of the trust (including, in some instances, removing some beneficiaries).

If you have any concerns around the structure of your trust, your lawyer would be happy to discuss these with you and advise the best course of action for your circumstances.