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A couple of the key issues that are being addressed by the new law is Trust administration and the lack of transparency for Beneficiaries. Many Trustees have been found to be lacking in these areas when matters have ended up in court. These new rules will impose mandatory obligations that have to be followed. This may cause concern for some Trustees.
Some of the issues we are seeing and that we anticipate will become more problematic under the 2019 Act if action isn’t taken, include:
Lack of records of trust decisions and the settlor’s intentions for the Trust;
Lack of separation of trust financial records from trustees’ personal records;
Trust deeds with a long list of beneficiaries that are wider than was really intended, meaning that there are a wide group of people who will need to have information disclosed to them when the Act comes in to force;
Insufficient clauses in Trust Deeds to contract out of the default duties under the new Act.
To ensure that you are up to date and ready for the changes, we recommend that you
undertake a review of your Trust and associated documents and transactions to ensure there won’t be any issues when the new law comes in effect. We can assist you with the review of your Trust.
Completing / updating any missing or incomplete documentation;
Updating the Trust to ensure the beneficiaries who need to receive disclosure of Trust information are narrowed to those people you want to provide information to;
Updating the Trust to ensure the default duties under the new Act are appropriately contracted out of;
Potentially winding up the Trust and distributing assets if it is deemed the Trust is no longer of any benefit to you.
Does the Trust continue to meet your objectives?
Are you willing and able to undertake the increased obligations?
Are you comfortable with managing the Trust properly going forward?
Are you aware of the information that needs to be provided to all the beneficiaries?
Will the Trust be cost-effective with the extra Trust law compliance requirements?