The Trusts Act 2019 (“Trusts Act”), which came into force on 30 January 2021, is intended to encourage better trustee accountability, ensure beneficiaries are aware of their rights and create a clear process around the disclosure of trust information to discretionary beneficiaries. 

The Trusts Act creates a presumption that “basic trust information” will be provided to every beneficiary of the Trust and additional “trust information” to any beneficiary who requests it.

What is the basic trust information?

Basic trust information is:

• Informing each beneficiary that they are a beneficiary of the trust
• Trustee names and contact details
• Being notified when a Trustee is appointed, removed or retires from the trust
• Being notified that a beneficiary can request a copy of the trust documentation

Providing the basic trust information is an ongoing obligation of the Trustees and they are required to consider at reasonable intervals whether they should be making the information available.

Can a beneficiary ask for more information?

A beneficiary can ask for additional trust information too, particularly information that a beneficiary may need to enable the trust to be enforced and managed properly.  They can request:

• A copy of the Trust Deed
• Trust financial statements or trust accounts
• Details about how the trust is being managed

Neither the basic trust information nor the additional trust information includes disclosure of trustee reasons for their decisions. 

Can a Trustee decide not to disclose information?

The Trusts Act sets out a number of factors to consider before Trustees make the decision to disclose information.  After taking those factors into careful consideration, the Trustees may decide to withhold some or all of the information from one or more beneficiaries.  These factors include:

• What kind of interest the beneficiary has in relation to the other beneficiaries
• Whether the information requested is subject to personal or commercial confidentiality
• The expectations of the settlor of the trust when the trust was created as to disclosure of information (if known)
• The age and circumstances of the beneficiary
• The effect on the beneficiary and on the trustees and other beneficiaries of providing the information including the potential impact on relationships in the family
• Practical considerations in providing information to all of the beneficiaries

What if a Trustee decides not to disclose information?

If the Trustees do not provide any trust information to any beneficiary either because:

• the beneficiaries cannot be identified or
• Trustees decide to withhold the basic trust information from all beneficiaries or
• Trustees refuse a request for additional information,

the Trustees must apply to the court for directions as to whether the decisions to withhold was reasonable and for alternative ways the trust can be enforced by the beneficiaries.

The court application does not need to be made if the period during which no trust information provided is less than a year and at the end of that period the basic trust information has been given to at least one beneficiary. 

If you are a Settlor, Trustee or beneficiary of a trust and have questions about disclosure of trust information please get in touch with the team at office@totaralaw.co.nz.

Please also see our article on “Trust Law Changes”

Special thanks to Danielle Norrie for preparing this article.