Part 1General provisions
6Overview of this Act
This section is only a guide to the general scheme and effect of this Act.
Part 1 contains general provisions, including provisions that—
- state the purpose and principles of this Act; and
- set out to which trusts the Act applies; and
- set out the relationship of the Act with the terms of a trust, the common law and equity, and other enactments; and
- set out how this Act is to be interpreted; and
- define certain terms used in this Act.
This Act generally applies only to express trusts, but there are some exceptions (see section 5(1) and (2)). An express trust is one that is intentionally established by a settlor, as opposed to a trust that arises by operation of law (as listed in section 5(2)(b)) or the order of a court.
Part 2 contains fundamental provisions about express trusts. An express trust is a relationship in which a settlor places property on trust to be held by 1 or more trustees for the benefit of beneficiaries or a permitted purpose. As a fiduciary, each trustee owes duties and is accountable for how the trust property is managed and distributed (see sections 12 to 15).
Part 2 includes provisions that—
- set out the characteristics of an express trust; and
- specify how an express trust may be created; and
- specify the maximum duration of most express trusts (which is 125 years) and abolish the rule against perpetuities; and
- specify the age of majority for the purposes of an express trust (which is 18).
Part 3 relates to the duties and information obligations that are part of the role of trustee. In particular, it contains provisions that—
- set out the mandatory duties that apply to trustees of all express trusts; and
- set out the default duties that apply to trustees of a trust unless the terms of the trust modify or exclude those duties; and
- restrict the use of trustee exemption clauses and trustee indemnity clauses (which limit the degree to which trustees can be held accountable for certain misconduct) in the terms of a trust; and
- set out the documents that must be kept by trustees and the information that trustees must give to beneficiaries (and that aim to ensure that beneficiaries have sufficient information to enable the terms of the trust to be enforced against the trustees).
Part 4 relates to the powers trustees have in their role and sets out the indemnities that apply to trustees. It includes provisions that—
- provide for the general powers of trustees to manage trust property (which give trustees all the powers necessary to carry out the role); and
- provide for certain specific powers of trustees, such as the power to invest trust property and powers to use trust property for the welfare of a beneficiary outside of the powers relating to distribution of trust property specified in the terms of the trust; and
- set out the power of a trustee to appoint others to exercise certain powers or perform certain functions in relation to the trust and specify which powers can be given to others in this way; and
- set out the power of a trustee to delegate all of the trustee’s powers and functions to another person in specified circumstances when the trustee is temporarily not able to carry out the role; and
- provide for the appointment of a non-trustee adviser (a special trust adviser) to advise on matters relating to a trust; and
- set out certain indemnities of a trustee (that is, the right of a trustee to be reimbursed for an expense or a liability out of the trust property) and protections for trustees.
Part 5 relates to who may be a trustee and how the role may start and end. It includes provisions that set out—
- who may be appointed as a trustee (and who is disqualified); and
- how trustees may be appointed and by whom; and
- how a person may accept or reject appointment as a trustee; and
- how a trustee may retire; and
- how a trustee may be removed (and the procedure a trustee can use to challenge the removal); and
- how legal ownership of the trust property is changed when there is a change of trustee.
Part 6 contains provisions that enable beneficiaries acting together to decide to bring a trust to an end, vary the terms of the trust, or resettle the trust property on a new trust.
Part 7 relates to the powers that the court has in relation to trusts, and enables the use of alternative dispute resolution. It includes provisions that—
- set out the court’s general power to review an act, an omission, or a decision of a trustee, and the procedure for this review; and
- set out powers of the court in relation to actions involving trusts; and
- set out applications that a trustee may make to the court, including a general ability to apply to the court for directions; and
- give the Family Court the power to exercise jurisdiction under this Act in specified circumstances; and
- provide for alternative dispute resolution processes to be used to resolve internal and external trust disputes.
Part 8 contains miscellaneous provisions, including provisions—
- relating to the transfer of trust property to the Crown; and
- relating to the investigation of the condition and accounts of certain trust property; and
- empowering the making of transitional regulations; and
- relating to consequential amendments and repeals.
Part 9 contains amendments to other Acts.
Schedule 1 contains transitional, savings, and related provisions.
Schedule 2 specifies provisions of this Act to which section 5(4) applies.
Schedule 3 defines specified commercial trust and provides that certain provisions of the Act do not apply to certain of those trusts or apply unless modified or excluded by the terms of the trust.
Schedule 4 sets out consequential amendments to other Acts.
Schedule 5 provides for amendments consequential on the repeal of the Perpetuities Act 1964 and the rule against perpetuities.