The new Trusts Act 2019 came into effect on 30 January 2021 with legal requirements that are more prescriptive than in the past. It replaces the Trustee Act 1956 and modernises the law with some significant changes.
Our view is that trusts continue to be an important structure for estate planning and an excellent option for managing wealth in the right circumstances. However, we urge clients with trusts or who are trustees to take care to come up to speed with the new requirements that make core trust principles and trustee obligations more transparent.
What you need to know
Trustees have increased responsibility for holding core documents and for disclosing information to beneficiaries.
Beneficiaries may need to be told they are beneficiaries of a trust and entitled to basic trust information. This will require trustees to manage beneficiary expectations.
What should you be doing now?
If you’re a trust settlor or trustee, you need to start administering your trust in line with the new law from 30 January 2021.
You need to consider:
- You’re willing and able to undertake the increased obligations
- You’re comfortable with the increased information provided to beneficiaries
- The reasons for setting up the trust are still relevant
- The trust will offer the same protection
- The trust will still be cost-effective with the extra trust compliance requirements.
You should also consider:
- Do the governing documents need to be reviewed?
- Do all trustees understand their duties and responsibilities?
- Are appropriate governance policies and practices in place?
- What might greater disclosure of information to beneficiaries mean?
- Have trust settlors made wishes known to guide their trustees?
What we'll be doing now
We’re here to help you work through what is best for you and your trust. We’ll also ensure that where we act as a professional Trustee for a client, our governance practises meet the new legal demands.
Here’s some further reading you may find helpful.
Prepared by Ashleigh Gilmour, Moore Markhams associate director. Ashleigh has expertise around Trusts, working with clients on their requirements over the past 15 years. She is a member of a national Moore Markhams team that has ensured the Group has best practice in place to meet the new requirements in the Trusts Act 2019 that came into effect 30 January 2021.