Law change set to make trusts more transparent for beneficiaries

In what is dubbed as the biggest change to trust law in 60 years, people entitled to benefit from trusts will soon receive basic information about them. For some, finding out they’re a beneficiary of a trust may come as a surprise.

Following an 18-month lead-in, on January 30 the new Trusts Act takes effect. Replacing the Trustee Act 1956, it puts greater responsibility on trustees, who hold and administer trust assets on beneficiaries’ behalf.

Henry Stokes, general counsel at estate planning firm Perpetual Guardian, said new disclosure requirements give beneficiaries the right to know a trust exists. They’re entitled to receive basic trust information: who the trustees are, their contact details, and any changes to trustees.

“From a beneficiary’s perspective, that’s to occur ‘as of right’: they don’t have to ask for the information – it’s to be given to them without asking or contacting the trustee/s,” Stokes said.

“The changes to the Trustee Act 1956 are the biggest we’ve seen in 60 years… it wasn’t common to have a trust in the 50s, whereas now it’s more common.”

Beneficiaries will also have the right to ask for more information, such as a copy of the trust terms. Effectively, this will ‘lift the hood’ on trusts, an option many beneficiaries are expected to take up.

“The Act ensures beneficiaries have access to sufficient information to ensure the trustees are doing their job,” Stokes added.