Rights of Trustees and beneficiaries regarding trust information
If you are the beneficiary of a trust, the general principles are:
- Trustees owe a fiduciary duty to keep beneficiaries informed and this includes providing trust accounts; and
- Whilst beneficiaries are not entitled to disclosure per se, they have a legitimate expectation to see trust documents in order to hold the trustees to account, and the ability to order disclosure of this falls within the Court’s inherent jurisdiction to supervise trustees in the performance of their duties.
The approach that should generally be taken for different types of documents is as follows:
- Trust documents should generally be disclosed if requested (this includes deeds of appointments and documents which vary the trust);
- Trust accounts should be disclosed;
- Settlors’ letters of wishes should be considered but remain confidential documents and there is no presumption to disclose them;
- Legal advice is privileged against third parties but not beneficiaries if it is paid for from the trust fund;
- Legal advice relating to trustees’ disputes with beneficiaries is privileged; and
- The Court may order the disclosure of company documents where the trustees have a controlling shareholding in a company.
Trustees should note that beneficiaries do not have to prove that there is a “real suspicion“, but rather the Court will decide whether it is proper for them to interfere. Additionally trustees are reminded that the Court may not view it positively if disclosures are only made begrudgingly and upon the imminent threat of legal action.
From the perspective of beneficiaries, they must ensure that document requests are framed properly and not overly wide or seeking information (as opposed to documents).
If you are either:
(i) being denied information from a trustee; or
(ii) receiving requests for information from beneficiaries (or anyone else for that matter);
please click here to speak to one of our experts.