Lois Gilmor: The Trust Act is changing. What you need to know and how to be prepared.
On 30 January, the Trusts Act 2019 that was passed on 30 July 2019, replaced the Trustee Act 1956.
How a trust is managed has changed significantly and it’s important that you understand the key changes, whether you are a trustee, settlor or beneficiary.
Trustee duties: For the first time, trustee duties will be set out in an Act. Complying with trustee duties under the new Act, specifically the mandatory duties, will involve more time and potential cost to ensure the trustee is meeting these expectations.
Notifying beneficiaries: Beneficiaries will need to know that they are in fact, a beneficiary of a trust. Beneficiaries might include wider family members, such as siblings, children’s spouses, the guardians of any minor beneficiaries and any charities.
Beneficiary rights to information: Trustees will need to provide beneficiaries with basic information and additional information if requested.
The age of majority: The legal age at which a minor beneficiary is considered an adult beneficiary will change from 20 years to 18 years of age.
Things to consider
In light of the recent changes, it’s important to think about how it might affect your trust, moving forward.
Is the trust still meeting the needs of the beneficiaries? It might pay to consult legal advice to review the trust against its original purpose and consider whether it still provides the protection originally intended.
Future trusteeship. With increased obligations for trustees and those who have been named trustee or co-trustee, there might be uncertainty that they are up to the job, given the new responsibilities. It might be worth considering enlisting a professional trustee service like Public Trust, especially in the case of inheritance trusts, where the primary beneficiary(ies) are named co-trustees automatically. An independent trustee, like Public Trust, can enhance the asset protection for the trust.
Beneficiaries. You might want to adjust the list of current beneficiaries to ensure trust information is only supplied to people likely to receive a benefit from the trust.
What you need to do
If you’re a settlor, trustee you will need to start administering your trust in line with the new law.
Think about the following:
Are you comfortable with the increased information provided to beneficiaries?
Are the reasons for setting up the trust still relevant?
Does the trust still offer the same protection?
Is the trust still cost-effective with the extra time and potential costs it takes to comply with the new standards?
Are the trustees willing and able to undertake the increased obligations?
Trusts have always been created to support and protect those closest to us, now and into the future. With the new changes, it’s recommended to review your trust in line with the new changes, to make sure it’s still serving the intended purpose.
Using an independent trustee service, can take out the guess work and give you the expertise you need to have the peace of mind that everything is being managed correctly.
You can read more about the changes to the trust act here.
How we can help
Public Trust can provide expert trustee services to assist in the management of your trust. We can make sure your trust records are kept up to date, tax and legal requirements are met, and that the trust is complying with law changes.
If you’d like to find out more about our review service, discuss the Trusts Act, or talk to us as the professional trustee for your trust, give us a call on 0800 371 471 or email [email protected]
Author: Lois Gilmor, Senior Solicitor at Public Trust