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Are you a beneficiary of a Trust?

View profile for Richard Horwood
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If you are a beneficiary of a Trust you may wonder what your rights to information and documentation may be.  A distinction may need to be drawn between the type of trust originally created, in particular whether you, as a beneficiary, have a fixed right, often the case with a life interest trust, or whether you are a potential beneficiary of a Discretionary Trust.

You may be keen to know of what the trust consists and whether or not you will receive any funding.

The Trustees have a duty to keep clear and accurate accounts of the trust funds and provide information to beneficiaries.  As a minimum, beneficiaries are entitled to copies of the documentation evidencing the existence of the trust, details of his or her own interest under the trust and a copy of any trust documents, including accounts.

Trustees will wish to consider the nature of the beneficiary’s interest and the information being requested.  Consideration will need to be given about how proportionate it is to disclose such information, the reasons for the request and whether or not such information is commercially sensitive or subject to legal privilege.  For example, if there is a dispute between the Trustees and the beneficiaries it is unlikely that the Trustees would disclose such information to them.  Furthermore, if the beneficiary has only been included to widen the class of potential beneficiaries, and is unlikely to receive any actual benefit from the trust, then the Trustees can refuse to disclose such information.

In some instances, it may be appropriate for documentation to be disclosed after such documents have been redacted to prevent disclosure of particular detail.

It is often the reasons why Trustees have acted in a particular way that can cause greatest concern to beneficiaries.  In the case of Discretionary Trusts Trustees do not have to justify their actions to a particular beneficiary, nor do they have to provide reasons as to why they may have benefited another beneficiary.  However, if the beneficiary feels that the Trustees have exercised their discretion without proper consideration or, for example, if they have made a decision based on inappropriate reasons, spite or malice then a beneficiary could make an application to the Court.  The Court will then need to decide if the trust information should be disclosed.  However, serious consideration should be given to making such an application because if it is unsuccessful there may be a personal liability to pay the fees of the Trustees.

There are no clear cut and definitive rules about the disclosure of information to beneficiaries and it will often be determined by the particular facts of the case.  If you wish to discuss your own situation with us in more detail then please contact a member of the Private Client Practice Area at Longmores.

 

 

Please note the contents of this blog are given for information only and must not be relied upon. Legal advice should always be sought in relation to specific circumstances. 

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