The Trusts Act 2019 comes into force on 30 January 2021 and brings with it several important changes that increase trustee responsibilities. This includes new beneficiary disclosure obligations and a requirement to respond to their requests for further information. Section 51 of the Act provides that trustees must issue beneficiaries with “basic trust information” without beneficiaries having to ask for it.
The basic trust information to be provided to all beneficiaries includes:
· The fact that the person is a beneficiary of the trust;
· The name and contact details of the trustee(s);
· 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 trust information.
Before providing the information, trustees must consider a range of factors set out in the Act and if the trustees reasonably consider that the information should not be disclosed, then they may withhold it.
This is a major change for trustees and one of the key intentions behind the new Act is to ensure that beneficiaries have sufficient information to enforce trusts in which they have an interest. Trustees must be in a position to have assessed the requirement to provide or withhold information and to communicate basic trust information to all entitled beneficiaries by 30 January 2021.
Accordingly, it is important for trustees to take steps now to ensure they have in place:
(i) a robust decision-making procedure around the provision of information;
(ii) a complete list of all beneficiaries of the trust (and their contact details); and
(iii) a proper plan for communications with beneficiaries.
We understand that this requirement is a significant change for trustees, and we have begun to work through this process with our existing trust clients.
For further assistance, please contact the General Manager of our trust management team, clinton.tamati@tp.co.nz, +64 21 916 226