Am I entitled to a copy of the Family Trust Deed?

 

In responding to a beneficiary’s request for trust information, trustees should follow these essential steps and consider seeking independent professional advice due to the potential complexities involved. A seemingly straightforward request can escalate into a challenge, impacting the trustee’s actions and possibly leading to the Trustee’s removal if deemed improper. Navigating trust transparency requires careful consideration to protect the interests of both beneficiaries and trustees.

 

• Automatic Rights: Beneficiaries with a proprietary interest, like unit holders in a unit trust, have an automatic right to access trust information under the “proprietary approach” in Australia. This applies where the beneficiary has a right to receive something from a Trust, such as fixed income, rather than an expectation to be considered as a possible recipient of a benefit from a trust, as in the case of Discretionary Trusts

 

• Discretionary Trusts: In discretionary trusts without a proprietary interest, the Court has supervisory jurisdiction and can determine what information should be provided to a beneficiary.

 

Court’s Approach to Accessing Trust Information:

 

• Growing Inclination: Recent cases indicate the Court’s inclination towards compelling trustees to provide comprehensive information, especially when there’s a close association between the beneficiary and the trust.

 

• Close Beneficiary Presumption: The presumption in favor of disclosure primarily applies to close beneficiaries, who have received or are expected to receive trust distributions or are explicitly named as primary beneficiaries.

 

• Scope of Documents: The presumption for disclosure includes essential trust-related documents but may exclude internal trustee documents, such as discussions about discretionary powers.

 

Key Considerations for Trustees:

 

• Specific Information Request: Obtain details about the requested information and the purpose behind the request.

 

• Trust Deed Reference: Refer to the trust deed to understand the rights and obligations of both parties.

 

• Beneficiary’s Relationship: Differentiate between close and remote beneficiaries to determine the level of disclosure.

 

• Thorough Documentation: Document decisions to grant or reject the request meticulously to navigate potential challenges.

 

DISCLAIMER

This is a commentary published by HazeLegal for general information purposes only. This is not meant to be taken as particular advice. You should seek your own legal and other advice for any question, or any specific situation or proposal, or get in touch with the writer at http://hazelegal.com.au before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories.

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