Trustee obligations: core documents to be kept by trustees

There is no doubt that many trusts are carefully administered by prudent, well informed trustees. However, there are also many trustees who have little knowledge of their obligations, the trust property they administer or even the terms of the trust deed which they agreed to uphold.

The Trusts Act 2019 imposes a new obligation on trustees to keep “core documentation”. A list of core documentation is described in the Act and includes:

• The trust deed and any other document that contains terms of the trust
• Any variations made to the trust deed or trust
• Records of the trust property that identify the assets, liabilities, income, and expenses of the trust and that are appropriate to the value and complexity of the trust property
• Any records of trustee decisions made during the trustee’s trusteeship
• Any written contracts entered into during that trustee’s trusteeship
• Any accounting records and financial statements prepared during that trustee’s trusteeship
• Documents of appointment, removal, and discharge of trustees (including any court orders appointing or removing trustees)
• Any letter or memorandum of wishes from the settlor
• Any other documents necessary for the administration of the trust
• Certain documents that were kept by a former trustee during that person’s trusteeship and passed on to the current trustee

Every trustee must keep a copy of the trust deed and any variations made to it. At least one trustee must hold all the other core documents for as long as they hold office and make them available to beneficiaries on request. If a trustee retires or is removed, then the core documents must be passed on to the replacement or continuing trustee.

What can you do to prepare?

• Gather your documents together

The Act provides that the core documents must be held “so far as is reasonable”. If your trust records are in disarray it may take time to pull all the records together. Start preparing for the Act’s implementation now by gathering the trust documents together and identifying where any gaps exist.

• Decide who will hold the core documents

If your trust has more than one trustee, then one trustee must be selected to hold the full suite of core documents. Even if a trustee is not personally responsible for this, every trustee must be satisfied that this obligation is being complied with by at least one of them.

Topics to be covered in the next edition:

• The provision of basic Trust information to beneficiaries.
• Trustee’s Mandatory Duties.

If you have any questions about the matters raised in these articles, please call to discuss further.

Lifelaw team

Stephen Jeffery, Monica Ryan, Gerard Thwaites, Chris Anderson, Rosemary Aitken, Vanessa Boyd, Sherie Adams, Lisa Penn, Ant Lilley, Julie Hutton