moorfield wrote:Are trustees accountable to beneficiaries and if so how? eg. Are they obliged to send a regular reports of investments held in trust.
This is my understanding. I'm no expert. In short I do not believe the trustees are accountable to the beneficiaries. They are required to act in accordance with the Trust deed. I'm not sure about the second one, but I'm also not sure in what circumstances if the beneficiaries are of a suitable age and show sufficient interest why the Trustees would not be accomodating. Certainly I'm not sure how a Trustee could refuse a reasonable request for information from a likely beneficiary but my instinct is it doesn't have to be legally provided every year.
My more detailed view follows:
The trustees should manage the Trust as set out in the Trust deed. This will set out the beneficiaries which in the case of the discretionary trust I think are you probably thinking about would be the offspring of the settlor and the further offspring of the offspring and so on. Further, it's usual that the powers of the Trust can be so wide that if the Trustees agree almost anyone except the settlor and the wife of the settlor but not his widow can be a beneficiary.
Next there may or may not be an expression of wishes made by the settlor giving some guidance from the settlor as to his wishes for the Trust. This is only an expression of wishes though, has no meaning in law and the Trustees do not have to follow it, although of course largely they would. I would recommend an expression of wishes. The discretionary trust I am a trustee of does not have one that I am aware of, which did not matter so much when the settlor (my father) was one of the Trustees, the issue being of course that discrtionary trusts can run for 80 or 125 years and things change.
We hold an AGM, at which a written report is prepared showing the investments, the performance of the Trust and also any legal or tax matters that have been dealt with, in progress or that may require planning. In practical terms there are 4 likely beneficiaries at present of which 2 are trustees. Because the Trustees are also beneficiaries, great care is taken in the AGM report to ensure there is no conflict of interest. The AGM report is not shared with the 2 beneficiaries who are not trustees (my children). They do of course know about the Trust and are very grateful for the cheques they receive from the Trust which pays University and School fees.
If in due course if my children requested some money from the Trust for say deposit towards a mortgage I'm sure the Trustees would be supportive. If they requested funds to go on holiday this would not fit with my perception of what should have been written in the expression of interests. We might have to have a debate about that if it ever occured...
At some future point, probably around the time that my children have children, I will recommend that my children become Trustees.