Social Media

Can a trustee deny access to a beneficiary?

Can a trustee deny access to a beneficiary?

Only in limited circumstances will legal advice provided to a trustee be privileged such that access can be validly denied to beneficiaries of the trust. A number of recent decisions have confirmed that beneficiaries and trustees share a joint privilege in legal advice concerning the management or administration of the trust. [1]

Can a trustee and beneficiary be adversaries?

However, Bergin CJ in Equity made clear in Gray v BNY Trust Company of Australia Ltd (Formerly Guardian Trust Australia Ltd) (Gray) that the beneficiary and trustee must be adversaries in a real sense at the relevant time. The facts of that case are helpful to illustrate the point.

What kind of advice is given to a trustee?

advice to the trustee on “matters which might be said to have a bearing on the available fund or assets in respect of which a discretion might be exercised”; and “advice about the vesting of a trust and the taxation implications of that event”.

Why is there joint privilege between a trustee and beneficiary?

The joint privilege arises by virtue of the formal legal relationship between the trustee and beneficiaries, who have a correlative duty and interest, respectively, in the proper administration of the trust. That relationship gives rise to a shared interest in advice concerning the management and administration of the trust. [2]

How can a trustee do the wrong thing?

The trustee had some conversation or thinks they remember some conversation that they had some time ago with the person who created the trust. Their memory of that conversation is different from what the trust itself actually says. The trustee does the wrong thing and relies on their memory rather than the terms of the trust.

Why does a trustee not make a distribution?

Some trustees won’t make distributions because they’ve done something wrong and they’re hoping to cover it up by not making the distribution. The trustee may have mismanaged trust assets or, in some cases, wrongfully taken trust assets for themselves.

Can a trustee get along with the beneficiaries?

Your job as trustee will be infinitely easier (and you’ll be far more effective) if, right from the start, you have cordial dealings with the trust beneficiaries — the people who benefit from the trust money. Here are some tips. (For basic information on serving as a trustee, see Nolo’s article Trusts: Should You Serve as Trustee?)