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Authors: Chris Kelly, Kimberly Lawrence
Published: 22 July 2020
Pages: 21

Introduction

This paper is concerned with the impact of the Trusts Act 2019 (the Act) on the drafting of trust deeds. While many of the clauses that have traditionally been included in trust deeds will still be appropriate in new trust deeds, extra steps may need to be taken to ensure compliance with the requirements of the new legislation.

The Act does not come into force until 30 January 2021. Until that time lawyers will be free to draft the deeds as they have done in the past, although to future proof those trust deeds, it would be wise to specify that the trust deed overrides the default duties set out in the Act (once it is in force) to the extent necessary to give effect to the terms of the trust deed. Investment provisions should be specifically addressed.

However, prior to 30 January 2021, it is not necessary to comply with all of the requirements which are set out in this paper. This paper is primarily concerned with the provisions that should be considered when preparing trust deeds for signature after 30 January 2021.

This paper will consider:

(a) The obligations to retain trust documentation and to give information to beneficiaries;
(b) The obligation to advise settlors about the effect of modifying these default duties;
(c) Modifying the default duties set out in the new Act;
(d) The limits on exemption clauses under the new Act;
(e) The duty to advise settlors about all such exemption or limitation of liability clauses; and
(f) Other miscellaneous provisions of the new Act, such as the new age of majority.

Content outline

• Drafting Trust Deeds
• Beneficiaries' Rights to Information
• Advising Settlors About Modification/Exclusion of Default Duties
• Modifying Default Duties
• Investment Powers
• Clauses Limiting Trustees' Liabilities
• Duty to Advise Settlors About Limitations of Liability
• Devolution of Powers
• Other Incidental Provisions

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