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Trustees are obliged to provide information but it comes at a price

Being a trustee of a discretionary trust can be an onerous job as they are given a lot of power to deal with the assets in the trust.

If you are a beneficiary of a discretionary trust you are entitled to receive information about that trust and the trustees are obliged to give it.

There has been speculation about what information the trustees can and cannot be obliged to give to those who benefit from a trust, and where the costs of such information are paid from.

A recent case answers this

In a recent case the trust concerned arose out of a Will whereby the deceased, who had two daughters, left her estate in a discretionary trust, with the majority being paid to one daughter and only 5% being paid to the other daughter.

The trustees were asked by the daughter for a breakdown of the payments made under the trust. The trustees refused out of concern for the family relationship and that she wouldn’t be happy with the imbalance of payment made to her compared to her sister.

She issued court proceedings demanding that this information was disclosed. The court decided that the information should be given to the sister under the trust as she was entitled to know. 

However, the costs of the court application were ordered to be paid out of the trust fund.

The court decided that by not giving the information to the daughter, the trustees had not actually caused any loss to the trust and therefore were not at fault.  They withheld the information in the interests of the relationship of the daughter and the deceased, and had acted properly in doing so.

The only time that the trustees would bear the cost themselves is if they committed a wrongdoing and caused the trust to lose money.

What should you do

If you are unhappy with the way that your trustees are running a discretionary trust you are to benefit from, you should seek independent legal advice as there are things you can do to obtain information.

For more information on this or to discuss the issue in more detail, please contact Mike Spencer on 0115 9 100 200 or click here to send an email.

Posted on April 29, 2016

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