Trusts need careful planning and administration to achieve their objectives. Trustees must manage the trust efficiently and keep full and proper accounts.
The Trusts Act 2019 imposes mandatory and default duties on Trustees.
The mandatory duties are to:
Know the terms of the trust
Act in accordance with the terms of the trust
Act honestly and in good faith
Deal with the trust property and act for the benefit of the beneficiaries in accordance with the terms of the trust deed
Exercise trustee powers for a proper purpose
Trust Documents
The Act requires trustees to keep core trust documents for the lifetime of the trust. Core documents include the trust deed and variations to the deed, details of assets and liabilities, financial statements, records of trustee decisions, contracts, appointment and removal of trustees, letters of wishes by the settlor, and other documents necessary for the administration of the trust.
Disclosure to Beneficiaries
The Act requires trustees to provide beneficiaries with basic information about the trust. Basic trust information includes:
The fact a person is a beneficiary
Name and contact details of the trustee
Details of changes to trustees as they occur
The beneficiary’s right to request a copy of the deed or further information.
The Act lists factors the trustees must consider before providing information to beneficiaries and includes a procedure trustees must follow if they reasonably consider that information should not be disclosed.
We recommend that trustees:
Open a separate bank account for the trust. Trustees should deposit all trust income into the account and pay all trust expenses and distributions from the account. The account should not be used for personal transactions.
Record all investments
Meet at least annually, to review the trust investments and the needs of the beneficiaries
Record their decisions in writing
Prepare annual financial statements
Ask Us about our Trust Risk Review Service which includes
Checking that deeds and minutes are up to date and on file
Checking that registers recording Trustees, beneficiaries, significant events and gifting programmes are properly maintained
Ensuring that the Trustees are undertaking a regular and appropriate review of trust investments and other strategies for the future
Checking that your Wills, powers of attorney and Memorandum of Wishes are up to date
We have extensive experience and offer specialist advice on creating and managing your trust.
