Before the introduction of the new Trusts Act 2019, there was no legislative requirement for Trustees to provide information to a Trust’s beneficiaries.
The Trusts Act 2019 introduced new disclosure rules which has now placed a presumption on Trustees to disclose basic trust information to all beneficiaries.
The need to disclose information has understandably raised concerns for Settlors and Trustees. Beneficiaries, after learning of the Trust’s existence, may start asking questions or this may give younger generations a sense of entitlement, which may be worrying for some families.
What information is “basic” trust information?
The presumption of “basic” trust information is set out in Section 51 of the Trusts Act 2019 and includes:
- The fact that a person is a beneficiary of the trust; and
- The name and contact details of the trustees; and
- The occurrence of, and details of, each appointment, removal and retirement of a trustee as it occurs; and
- The right of the beneficiary to request a copy of the terms of the trust or information.
In practice, this would be a short notice to each beneficiary confirming that they are a beneficiary, the names and contact details of the trustees and that they may request further information in relation to the trust.
Is it a requirement that I provide this information to beneficiaries?
The disclosure of information is a presumption which means that the Trustees will need to decide whether they will disclosure basic trust information to beneficiaries, and if so, to whom.
Alongside the presumption to provide basic trust information, Section 52 of the Act contains a presumption that Trustees will disclose trust information upon request from a beneficiary, unless, after considering the factors listed in Section 53 of the Act, the Trustees consider that the information should not be given to the beneficiary.
Section 53 of the Act sets out the procedure that Trustees will need to follow when deciding whether the presumptions to disclose basic trust information or to disclose trust information upon the request from a beneficiary applies. There are multiple considerations that Trustees will need to consider when deciding whether they are presumed to disclose trust information, including but not limited to:
- The nature and interests in the trust held by a beneficiary and other beneficiaries including the likelihood of the beneficiary receiving trust property in the future;
- The age and circumstances of the beneficiary;
- The effect on the beneficiary of giving the information; and
- The practicality of giving information to all beneficiaries in the circumstance where a trust has a large number of beneficiaries or unascertainable beneficiaries.
If the Trustees after considering these factors think that it is reasonable to not provide basic trust information or the information requested by the beneficiary, then the Trustees can refuse to provide the information.
Although the Act allows for potential refusal to provide trust information to beneficiaries, it is important that you seek legal advice before doing so. Knowingly breaching a statutory obligation would be considered willful misconduct which could impact a Trustee’s liability.
If you have not provided basic trust information to the beneficiaries of your trust or you want to know what you need to do, contact our team today and we would happily guide you through the process to ensure that you are meeting your obligations as a Trustee.
