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What Rights Do Beneficiaries Have to Information On A Trust?

Posted: Friday, 8 November 2019 @ 10:22

With respect to problems with trusts a beneficiary does have a right to significant information which we will consider below. 

The trustees have discretion and should conduct a balancing exercise, considering all the relevant facts when receiving requests for information. 

The trustees should consider what is in the best interests of the beneficiaries as a whole. They should also consider what the purpose of the request is.

Typically the types of document which beneficiaries most commonly request are: 

The trust document - This is a key document  which trustees should disclose to beneficiaries if requested.

The same applies to supplemental documents such as:  

•         Documents of appointment and retirement of trustees.

•         Documents adding assets to the trust.

•         Documents varying the trust.

The trustees may wish to redact information that does not relate to the beneficiary making the request (for example, by obscuring the names of other beneficiaries in a deed).

If a beneficiary requests redacted information, the trustees ought to inquire why (there might be a valid reason, so they should not refuse outright).  

Trust accounts  - Trustees have a duty to keep clear trust accounts and to be constantly ready with those accounts.

“Being ready” with the accounts is important and trustees who are slow in producing accounts are likely to be penalised in costs should the matter go to Court.

Therefore, if a beneficiary requests a copy of the trust accounts, the trustees should provide a copy.

If they do not, the beneficiary can seek the accounts via the court, and the court usually orders the trustees to pay personally the costs of obtaining the order.  

In some circumstances, it may be appropriate for trustees to limit the information provided to a beneficiary.

For example, where there are sub-funds, it may be appropriate to ensure that the beneficiary sees only the information relating to the sub-fund in which he has an interest.  

Settlors’ letters of wishes

Settlors often leave a letter addressed to the trustees setting out their wishes in relation to the exercise of the trustees’ discretions.

Trustees must consider those wishes, but are not bound to comply with them. Settlors often specify that the letter is to remain confidential.    

When a request is made trustees should:  

•         Consider the reasons for the beneficiary’s request for a letter of wishes to be disclosed, and whether disclosure would be in the interests of the administration of the trust.

•         Not refuse disclosure simply because the settlor has requested that the letter remain confidential.

•         Not feel obliged to give reasons for their decision.

•         Consider obtaining an undertaking of confidentiality or, if appropriate, redacting information in the letter before disclosure.  

Conclusion - The above illustrates some of the information which beneficiaries can legally obtain from Trustees.