Trusts Act 2019: The Act, the terms and other laws

What is the relationship between the Trusts Act, the terms of the trust (e.g. the trust deed) and other laws?

Generally, where the Trusts Act is inconsistent with the terms of a trust, the Trusts Act will prevail. There are two exceptions:

• column 1 of schedule 2 specifies various sections of the Trusts Act that are able to be modified or excluded by the terms of a trust (subject to any limitations in column 2 of schedule 2); and

• schedule 3 provides that certain provisions of the Trusts Act are or may be modified or excluded in relation to specified commercial trusts. For example, the prohibition against a trustee being indemnified for gross negligence, does not apply to a specified commercial trust. A “specified commercial trust” is an express trust that is created for the purpose of facilitating a commercial transaction, a wholesale trust (e.g. a trust established in connection with an offer of shares in a company) or a security trust (e.g. a trust which holds security over the assets of a debtor for the benefit of one or more persons).

In terms of other laws - the Trusts Act is not an exhaustive code of the law relating to express trusts. The Trusts Act complements, not replaces, the rules of the common law and equity relating to trusts (except where those rules are inconsistent with the Trusts Act).

We have published A trustee’s guide to the Trusts Act 2019 (Guide) – the above is an extract from the Guide. If you would like a full copy of the Guide, please get in contact with us.

Disclaimer: This publication should not be construed or acted on as legal advice. It is brief and general in nature. Specific advice should be sought.