Those of you that are Trustees will be aware a new Trusts Act was introduced with effect from 31st January 2021.
Sections 45-48 (inclusive) of the new Act set out the documents Trustees must keep. Failure to keep such documents will be a breach of the Act. The sections bring more clarity to the documents to be retained and by whom.
The default rule is that each Trustee must keep as far as reasonable the following documents for the duration of the Trustee’s Trusteeship:
- the trust deed and any other document that contains terms of the trust:
- any variations made to the trust deed or trust:
- records of the trust property that identify the assets, liabilities, income, and expenses of the trust and that are appropriate to the value and complexity of the trust property:
- any records of trustee decisions made during the trustee’s trusteeship:
- any written contracts entered into during that trustee’s trusteeship:
- any accounting records and financial statements prepared during that trustee’s trusteeship:
- documents of appointment, removal, and discharge of trustees (including any court orders appointing or removing trustees):
- any letter or memorandum of wishes from the settlor:
- any other documents necessary for the administration of the trust:
- any documents referred to above that were kept by a former trustee during that person’s trusteeship and passed on to the current trustee.
The default position can be modified when there is more than one Trustee in that provided at least one Trustee retains all the documents the other Trustees need only hold:
- the trust deed and any other document that contains terms of the trust:
- any variations made to the trust deed or trust:
Other aspects to be aware of:
When a Trustee retires the documentation held must be passed onto at least one replacement or continuing Trustee.
There is no explicit ability for Trustees to delegate the record keeping responsibility within the Act. As such, it should not be assumed that the Lawyers and/or Accountants retain a complete set of the required documents.
In our view, with regard to the record keeping requirements, best practice would be for the Trustees of every Trust to discuss the record keeping requirements and in the event not all the Trustees are going to hold a full set of the records formally record that decision and whom is going to keep the full set.
If we can be of any assistance please make contact.