What does the new Trusts Act 2019 mean for you?
You may have heard recent discussions regarding the new Trusts Act 2019. This Act sets out new laws governing trusts. The Trusts Act has passed into law but most of the provisions will not apply until 30 January 2021.
The Trusts Act will apply to most existing trusts and will increase compliance obligations for most trustees.
This new Act will help to simplify much of the law relating to trusts by updating and replacing old laws and clarifying rules that have arisen from decisions by the Court over many years.
The Trusts Act also aims to increase transparency surrounding trusts and ensure that trustees can be held accountable if they do not look after trust assets in accordance with their duties. To achieve this, The Trusts Act creates new requirements for retaining records and disclosing information to beneficiaries.
Trustees will be required to disclose the existence of a trust and the contact details of the trustees to all of the beneficiaries of a trust and will need to provide updates if the trustees change.
Trustees will also need to advise beneficiaries that they are entitled to request certain trust information including:
- Any deed of trust;
- Any other document setting out the terms of the trust;
- Information regarding the administration of the trust;
- Information regarding property held on trust;
- Information that may reasonably be required in order for a beneficiary to ensure that the trust is enforced.
Trustees do not need to disclose the reasons for any decisions that they have made, and it will be possible for trustees to withhold information in some circumstances. Where disclosure is subject to personal or commercial sensitivity or where disclosure may be detrimental to family relationships, they may be able to withhold information. There are a number of factors that would need to be considered prior to withholding information. If trustees are unsure of their obligation of disclosure, specialist advice should be obtained.
For some families who have created trusts, the terms of the trust may have been considered private or confidential. If Trustees Executors is administering a trust, we will seek to contact our co-trustees and, where it is practical to do so, we may contact people who have set up the trust to discuss what will need to be disclosed and whether any exceptions may apply. This will also allow a family to discuss matters before we send information and will allow us to update the contact information for beneficiaries.
Some families may also be anxious that disclosing trust information may lead to expectations by beneficiaries. The Trusts Act will not generally alter a beneficiary’s right to receive trust assets, but it may alert some beneficiaries to their existing rights. Where beneficiaries have a definite entitlement to assets, it is likely that the beneficiary (or their guardian) is already aware of the position.
Trustees Executors will be reviewing its practices over the next year and we expect to make some changes to the way we operate to ensure compliance with the new law. In some instances, the costs of administering a trust may increase because the trustee or trustees will need to make disclosure to beneficiaries.
If you are a trustee or if you have set up a trust you may be interested to know how the Trusts Act will affect you. For trustees, their duties are now stipulated in the Trusts Act. If Trustees Executors administer a trust for you, your Trust Manager will be happy to discuss any concerns that you may have regarding the Trusts Act.
If you wish to talk to one of our Trust Managers please call:
0800 878 783 or email us at firstname.lastname@example.org