New Act modernises trust law
The Trusts Act 2019 was passed into law on 30 July 2019.
The Act, which replaces the old Trustee Act 1956, is intended to modernise and clarify trust law. It comes into force on 30 January 2021 and is important to understand if you have a trust or are a trustee.
How does this affect me?
- The Trusts Act requires more transparency around trust activities and puts into law the duties of trustees.
- Trustees will have increased compliance requirements for the trust and all trustees will be required to contact beneficiaries and supply them with basic trust information.
- The trustees will be required to notify the beneficiaries that they are in fact a beneficiary of a trust and be provided with basic information about the trust, without them needing to request it.
For my trust, what does this mean?
Over the years, trusts in various forms have been an important part of estate planning, and are an excellent option for managing wealth in the right circumstances, and providing asset protection.
However, for trusts existing before the Trusts Act, it could mean that:
- As compliance duties will increase, the time and cost to administer some trusts may mean that they are no longer cost-effective for some people.
- Providing greater transparency will put things out in the open that some trusts might want to keep private.
What needs to be done?
As a trust settlor, or trustee, your trust will need to be administered in line with the new Act from 30 January 2021.
We recommend you think about the following:
- Are you willing and able to undertake the increased obligations?
- With the increased information provided to beneficiaries, are you comfortable with this?
- Is the original intent of setting up the trust still relevant?
- Will the trust continue to offer the same asset protection?
- Due to the additional trust compliance requirements, will the trust still be cost-effective to administer?
What can we do to help?
We’re here to help you work through what is best for you and your trust. We will also ensure that, where we act as a Professional Trustee for a client, our governance practises meet the new legal demands.
You can expect that we will be talking with you in the coming months to help you understand the new trust law and how it impacts on you and your trust.