When to review your trust

In light of the recent and upcoming changes to the law governing trusts, now is a good time to review your trust. It’s common to create a trust and then not think about it again for years, but a trust is a living document. You should review it regularly, and update it where appropriate, just like your will.

When you review your trust, think about whether you still need it. Trusts are often set up to protect assets from creditors while you’re running a business. You may no longer need a trust if you have retired or are not employed. Identify your purposes for setting up the trust, and check that your trust deed still meets those objectives in a way that you are comfortable with.

Consider whether you need to update your trustees and beneficiaries. Your trust, just like a machine, will run better with regular maintenance. Are all your trustees working well together? If one trustee has retired or moved away, it may be easier to replace them. Make sure that all trustees are involved in decision-making, if that’s what your trust deed requires. If one or more trustees are just rubber-stamping decisions made by another trustee, they may be in breach of their duties.

Have the settlors of the trust written a memorandum of wishes, setting out what they want to happen to the trust after they die, or if they become incapacitated with dementia or illness? Although a memorandum of wishes isn’t binding on the trustees, they are expected to pay respect to what’s in it. The memorandum of wishes is also confidential, so trustees don’t have to show it to the beneficiaries.

If you need help reviewing your trust, or you want more information about the recent changes in the law, reach out to us.