Due to changes being introduced by the new Trusts Act it will be prudent to undertake a health check on your Trust this year.
Many trusts have been set up for the purposes of achieving asset protection, estate planning or structuring efficiencies, and those purposes are more than likely still valid today.
The new Trusts Act, however, introduces some fundamental changes to the way trusts need to be operated after January 2021, and these changes will apply equally to existing trusts and new trusts.
You, therefore, have a window of 8 months from now in which to consider what the implications will be for your trust come January 2021, and to determine if there are some changes that you would like to make to the Trust Deed before then.
The following key changes will apply to your Trust from January 2021:
- Increased trustee obligations – trustees can be held responsible to beneficiaries who suffer loss when trustees fail to act in the interests of the beneficiaries
- Disclosure to beneficiaries – all beneficiaries to be informed they are a beneficiary of the Trust
- Greater transparency of the Trust’s assets and activities – all beneficiaries to receive Trust information, such as financial statements and name and contact details of trustees, and their appointment or removal
- Increased compliance duties – all trustees to hold the Trust Deed and any variations to it, and one trustee to hold all core Trust documents, which beneficiaries can request at any time
- Perpetuity period increased to 125 years (previously 80 years).
If you would like to discuss the implications of the new Trusts Act on your Trust, or would like us to assist your lawyer with undertaking a Trust Health Check to determine if any amendments should be made to your Trust Deed, please contact your Hayes Knight advisor.