The Trusts Act 2019 (Act) became law on 30 July 2019 and will come fully into force on 1 February 2021. This transition period will enable trustees to ensure that existing trusts and trustee practices are amended to comply fully with the Act.
All trusts are covered by the Act, including personal and family trusts, commercial trading trusts, charitable trusts and trusts administered by corporate trustees. The only significant exemption appears to for statutory supervisors of retirement villages but this exemption will only operate by way of regulation at the recommendation of the Minister.
Simply, trustees will be much more accountable to beneficiaries, and beneficiaries will be entitled to access to information about the trust and their interests. Trusts may be varied but usually only with the unanimous consent of beneficiaries. There are exceptions for charitable trusts which do not define beneficiaries by name but as a class or group of qualifying persons.
There are limits around persons who are now unable to be appointed as trustees or who, if already appointed, must retire if they are unfit to continue to act, ‘unfit’ being defined in the Act.
Trusts that do not have a specified finality will have a statutory final distribution date of 125 years after the commencement date. The Perpetuities Act 1964 currently limits trusts to a life of 80 years and the Act permits existing trusts to move to 125 years with the consent of the beneficiaries. Again, charitable trusts are exempt as they generally can exist in perpetuity.
The main principles of the Act involve greater responsibility (for trustees) and greater transparency and accountability (as between trustees and beneficiaries).
If you are a trustee or a beneficiary, and any of the above raises questions or concerns for you, feel free to speak with someone at Lane Neave.
Business Law team
Gerard Dale, Claire Evans, Graeme Crombie, Evelyn Jones, Anna Ryan, Joelle Grace, Peter Orpin, Ellen Sewell, Matt Tolan, Carlo Wan, Kristina Sutherland, Jacob Nutt, Whitney Moore, Alex Stone, Ben Cooper
For personal and individual enquiries you can get in touch with a member of our Lane Neave Lifelaw team.
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