LEGAL

BMC Law Advises on What Information Trust Beneficiaries Can Access

Wednesday 28 August 2019, 5:07PM
By Beckie Wright
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Trusts are a well-established method of protecting property and managing assets. A trust is established when someone creates Trustees; other people to whom they can transfer property. Trust property is divided based on a Trust Deed.

Trusts can exist for many different reasons: education, other charitable purposes, or for specific members of a family. A beneficiary of the trust is someone who benefits from it, by either receiving income or capital. The beneficiaries of a trust do not need to be a trustee, but it is the trustees who legally own the property being delivered to beneficiaries.

If you are the beneficiary of a trust, it’s important to know where you stand. Once you know you’re a beneficiary of a trust, you’re entitled to request to benefit from it. To this end, you’re also entitled to ask a number of questions about the trust.

A beneficiary is entitled to ask a trustee for information about a trust including the Trust Deed, and any Deeds of Variation. Contact details of trustees, including former trustees of a trust, can also be requested. There are a number of other things a beneficiary may want to ask for, including relevant documents that cover replacements of trustees, but more importantly, a beneficiary should be able to access full details of the trust’s assets and liabilities.

Beneficiaries are legally able to access this information in order to ensure that trustees are acting in concert with the Trust Deed. If they are not, or if they outright refuse to give beneficiaries the information they are asking for, a beneficiary is able to appeal to the court to have the trustee replaced.

However, some information is not available to beneficiaries. Conventionally, beneficiaries are not privy to information that belongs to the trustee, not the trust, such as the decision-making process behind certain actions taken to vary and distribute a trust’s assets.

For more information, including further details of beneficiary rights, visit the BMC Law website here: https://www.bmc-law.co.nz/services/estate-planning/trusts/