Review And Restructure Of Trusts

As trusts are a long-term asset planning tool usually spanning many decades (and now up to 125 years), they require regular review from two key standpoints.

First, is whether the structure is still suited to your current circumstances. Considerations include whether:

• You have the correct number of trusts and have assets allocated between them in the optimal way for asset protection;
• The make-up of the trustees is appropriate (including the presence of an independent trustee);
• Trust assets have been legally transferred to the current trustees (especially relevant where there has been one or more changes in trustees); and
• The power of appointment of trustees is held by the appropriate person(s) and whether the mechanism for passing that power on the appointor’s death or incapacity has been provided for.

Secondly, there has been a significant change in the trust law landscape over the last decade, including the passage of the Trusts Act 2019 (“Act”). As a result, some older trust deeds can benefit from being updated to take these changes into account. Some common amendments include:

• Addition of a provision limiting the sharing of financial information with beneficiaries;
• Addition of a requirement for an independent trustee;
• Amendments to how certain powers are exercised and by who, to strike an appropriate balance of control of the trust by the trustees as opposed to the settlors;
• Updates to trustee delegation provisions, to ensure they are consistent with the limitations on delegations under the Act;
• Expressly noting where the trust deed modifies or excludes default duties of trustees that would otherwise apply under the Act; and
• Expressly excluding gross negligence from trustee liability and indemnity clauses, in line with the Act.

Tammy and the Trust Team are here to help you review and restructure your trust.

Contact us to discuss how we can help you.