The new Trusts Act 2019
Many of you have been asking about the recent changes in trust law, and how that will affect any trusts you have an interest in, whether as trustees or as beneficiaries.
The Trusts Bill received Royal Assent on 30 July 2019, so is now the Trusts Act 2019 (the Trusts Act). The Trusts Act will come into force on 30 January 2021. On that date, the Trusts Act will apply to existing and future trusts. The Trusts Act replaces the Trustee Act 1956 and aims to clarify trust law and make it more accessible to users.
Key changes include:
- The codification of mandatory duties of trustees (which cannot be excluded or modified in the trust deed):
- to know the terms of the trust;
- to act in accordance with the terms of the trust;
- to act honestly and in good faith;
- to act for benefit of beneficiaries or to further permitted purpose of trust; and
- to exercise powers for proper purpose.
- The codification of default duties on trustees (these apply unless expressly excluded in the trust deed):
- general duty of care;
- duty to invest prudently;
- duty not to exercise power for their own benefit;
- duty to consider exercise of power;
- duty not to bind or commit trustees to future exercise of discretion;
- duty to avoid a conflict of interest;
- duty of impartiality;
- duty not to profit;
- duty to act for no reward; and
- duty to act unanimously.
- Clarification of trust management and record-keeping requirements;
- Increased rights for beneficiaries to access trust information and corresponding obligations on trustees to provide it to them;
- Restriction on the use of trustee indemnity clauses;
- Tightening of rules around delegation of trustee powers;
- Introduction of alternative dispute resolution mechanisms; and
- Extension of the maximum duration of trusts from 80 years to 125 years.
Existing and new trusts will need to comply with the provisions of the Trusts Act. If you have any questions or require further information, please get in touch with a member of our team.
Nikki Burley – Partner – firstname.lastname@example.org
Sarah Tustin – Senior Solicitor – email@example.com