The Trusts Act 2019, which has been 17 odd years in the making is now law. The Trusts Bill passed its third reading and received Royal Assent on 30 July 2019, meaning most provisions of the Act come into force on 30 January 2021.
The Trusts Act replaces the Trustee Act 1956 and the Perpetuities Act 1964 with the intended purpose of making trust law more accessible, clarifying and simplifying core trust principles and essential obligations for trustees.
The Trusts Act preserves the flexibility of the common law and will continue to allow trust law to evolve through the courts.
The impact of the new Act will take some time to bed in. Perhaps the most significant change will be the presumption that trustees will notify all beneficiaries that they are beneficiaries and that they can request trust information. Now is the time for trustees to assess the terms of trusts by reference to the Trusts Act and to reflect on what their appointment and obligations will look like after the 18 month transition period. For further reflection on this see Perspectives on the disclosure of information to beneficiaries of family trusts.
For practitioners the challenge will be to apply current knowledge and case law to a changing paradigm. For beneficiaries this has perhaps been a long-time coming, but will likely not present the whole answer, but a step forward.
Note that a Supplementary Order Paper (SOP) dated 23 July 2019 was released prior to the third reading. The SOP made various changes to the Trusts Bill in its final form including:
• minor and technical changes to improve drafting
• a change to clause 137, 139, 141 and 142, which relate to arbitration agreements and awards, and
• a series of changes to ensure that certain provisions of the Bill and related provisions of the Financial Services Legislation Amendment Act 2019 will have the intended effect.