Disclosure beyond beneficiaries

The Trusts Act 2019 introduced a presumption that trustees will provide basic trust information to every beneficiary and will provide further information on request. Before doing so, trustees must consider the factors set out in section 53 of the Trusts Act.

Importantly, there is a procedure in section 54 of the Trusts Act where no beneficiary has trust information.

Where trust information is held by a settlor (but not the trustees) there may be circumstances where beneficiaries may wish to seek this information. See Lewin on Trusts (20th edition) at 21-126. In this regard it is noted that the definition of trust information is sufficiently broad to include information held by parties other than trustees. This is inferred in the Supreme Court decision in Addleman v Lambie Trustee Limited. See It’s mine said the trustee, all mine with respect to legal advice.

Perhaps surprisingly, the Trusts Act is silent regarding the provision of trust information to settlors, appointors and special trust advisers.

Helpfully, Lewin on Trusts considers this with regard to settlors at 21-127, the view expressed being that unless the terms of a trust confer rights of disclosure, a settlor will only be entitled to trust information in limited circumstances. These are where, as set out below,

1. a settlor is a beneficiary of a trust or under a resulting trust
2. the settlor has powers of appointment (or removal) – although there is an overriding requirement that this is in the beneficiaries’ best interests
3. the settlor wishes to make, revoke or up-date a memorandum of wishes. This raises questions of how such disclosure might be enforced
4. a settlor has reporting obligations relating to the trust whether in the jurisdiction in which the trust is tax resident or otherwise. Note that where there are negative implications for the trustees, directions may be in order before providing such information.

Where information is required by an appointor or special trust adviser, the position is less clear. As noted in Davidson v Seelig at [63]:

The practical response to this is enquiry is to agree how appropriate trust information might be acquired before accepting appointment as an appointor or special trust adviser.

References:

• Lewin on Trusts (20th edition), chapter 21
• Lambie Trustee Limited v Addleman [2021] NZSC 54
• Davidson v Seelig [2016] EWHC 549