The High Court Orders Trustees to give more information to beneficiaries

The High Court has ruled on the extent to which a beneficiary is able to request information from a trustee in relation to a trust and the application of legal professional privilege to any requested document.

This story involves a couple that bought a farm as beneficial joint tenants. Sensibly, Mr and Mrs Tamplin made a Will, entrusting their half to the other in the event of their death.

Following the death of Mr Tamplin, the estate was left to his wife as specified in the Will. Once she was the sole beneficial owner, Mrs Tamplin then created a trust, consisting of half the farm’s equity and left it to her six children. Upon her death, the trust was in place and her wishes were secured.

However, she had not made provisions or thought about the implications of her children dying. With four of her children now dead, the trust was passed on to their children, Mrs Tamplin’s grandchildren.

This is where the case was based. The two remaining children, Charles Edward Tamplin and Jane Wayne, became the trustees of the trust; the grandchildren becoming beneficiaries of the original beneficiaries, their parents.

The claimants and grandchildren wanted greater transparency of the trust and its investments. When they originally requested legal documents relating to option agreements as the farm had development potential and its value could exceed £10 million, correspondence from legal advisers and information relating to use and occupation of the land, the trustees refused to comply.

This information was originally rejected by the trustees, refusing to disclose the information as the grandchildren were not originally beneficiaries. County Court judgements ruled in favour of the grandchildren and declared them as official trustees that were entitled to information.

The beneficiaries were given some trust account documentation that they deemed to be inadequate which is where we find the case in the present day. The issues that needed to be determined by the court were:

  • whether the trustees were required to disclose further information regarding their stewardship of the Trust.
  • whether any of those documents attracted legal professional privilege in which case they could be withheld from disclosure.

The Court agreed that the beneficiaries had not been given adequate information by the trustees about issues pertaining to the Trust’s assets. Furthermore, the Court authorised the disclosure of the information requested by the beneficiaries.

However, the Court ruling was made with specific exceptions. The documents were restricted to those concerning the beneficiaries only. Any working papers belonging to advisers were not permitted, nor were any documents relating to the trustees in any capacity that did not relate to the trust.

The Court claimed that beneficiaries are only entitled to documents and advice protected by legal professional privilege, if those documents were created for the benefit of the trust and paid for out of trust funds.

The ruling also restricted beneficiaries to know how the trust assets had been dealt with; they were not entitled to request an explanation for trustee trust actions.

Have you experienced issues concerning ageing trusts that involve new generations of beneficiaries? Should we plan to involve hypothetical situations like the death of a direct beneficiary in a assets held in trust?   

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