Since the abolition of gift duty in October 2011, some trustees of a trust have not continued to have an annual meeting of trustees.

This is not good practice.  Even if there is no change in the Trust’s assets or liabilities or even any actions taken by the trustees, it is still prudent for the trustees to meet at least once a year to consider the Trust’s affairs. Any decisions made at this meeting should be recorded in written Resolutions of Trustees.

Many trustees are not aware that there are major proposed changes to Trust law.  The Trustee Act 1956 is over 60 years old.  For this reason, Trust legislation has been comprehensively overhauled in the new Trusts Bill that is currently before Parliament.

There are many proposed changes to current Trust Law and practice contained in the Trusts Bill. 

One major difference is the new requirement for trustees to keep all beneficiaries of the Trust informed about the Trust’s affairs. There is a presumption that Trustees will provide information to beneficiaries of the Trust.

Trustees will be required to provide information to every beneficiary of the trust. This includes:

• Confirmation that the person is a beneficiary of the trust;
• The names of the trustees and their contact details;
• That the beneficiary has the right to ask for and receive certain information about the trust;
• Information about any changes to the trustees of the trust
• The information that trustees will have to provide, if requested by a beneficiary, includes:
  • The terms of the trust (i.e. a copy of the Trust Deed);
  • Details of the administration of the trust;
  • Details of the trust assets

What exactly this will mean in practical terms is not yet certain.  Trustees should understand that now is not the time to be complacent.  There will be greater transparency regarding Family Trust administration in the future.  This will almost certainly result in greater accountability by Trustees for their decisions to the beneficiaries of that Trust. 

If you are a Trustee of a Family Trust, now is the time to ensure that the Trust is correctly managed.

We suggest that you contact your solicitor to ensure that the Trust records and administration will withstand scrutiny from beneficiaries.

www.schnauer.com