Trusts Act Proposed Changes
It has been some time since the Law Commission commenced its review of trust law with the intention of addressing problems that exist with the law as it stands. The Commission’s recommendations have now been reflected in a draft Trusts Bill anticipated to be enacted some time in 2017. Instead of looking to undertake a major overhaul, the Bill is intended to enhance and clarify the current law regarding trusts, which is a welcome relief given that the current legislation was enacted in 1956. The Bill does will also cement certain obligations on trustees to ensure they are carrying out their duties.
The proposed changes include:
- a description of the key features of a trust
- clear mandatory and default trustee duties (based on principles set down by the courts)
- requirements for trustees to manage and provide information to beneficiaries who have a reasonable likelihood of receiving trust property under the terms of the trust (qualifying beneficiaries)
- flexible trustee powers and updated rules about when trustees can authorise others to carry out certain trustee duties
- clear rules for variations and terminations of trust
- more options for removing and appointing trustees without needing to seek the assistance of the court
- preserving the ability to ask the courts to intervene to resolve problems or disputes.
Source: InBrief Summer 2016