Making trust laws more efficient

Overview

Bill 12, the Trustee Act, would make it more efficient to create and manage trusts while reducing the need to go to court.

If passed, the new Trustee Act will replace existing legislation with a new model that sets clear provisions to support improved day-to-day function of trusts for Albertans, including charities and businesses.

A trust is a legal document by which assets are held and administered for the benefit of others. The new act would improve the management of trusts for businesses, decrease administrative burdens on beneficiaries, and reduce the need for court involvement. This would result in cost savings for Albertans, and free up the court’s time and resources.

Alberta’s current trustee legislation is outdated and requires modernizing as it mainly deals with trusts under wills. The new act has been adapted for modern business to apply to things like real estate investment trusts that fund land developments and royalty trusts that finance the oil and gas sector. Trusts have evolved, requiring significant legislative reforms to bring it into the 21st century and to reflect the needs of Albertans.

Key changes

If passed, Bill 12 will modernize trustee legislation by:

• reducing administrative burdens and increasing the efficiency of trusts
• lessening the need for court involvement by specifying processes so that, in many instances, trustees and beneficiaries do not need court applications for most matters
• providing a basis for trusts that do not have extensive terms, while making sure people can still set their own terms
• clarifying trustees’ duties and their accountability to improve protection for beneficiaries
• decreasing the number of matters going to court resulting in cost savings in legal fees for Albertans, businesses and to free up court resources

Under the proposed model, new provisions include:

• requiring a trustee to exercise the care, diligence, and skill of a prudent person in a new duty of care provision, which would provide increased consumer protection consistent with similar provisions in the Estate Administration Act for a personal representative administering an estate
• including a duty to report to beneficiaries and to be responsive to beneficiary requests  would provide transparency and ensures proper administration of a trust
• allowing for a temporary trustee when a trustee is temporarily absent or incapacitated
• allowing for the removal of an unfit trustee and adding a process for a trustee to resign
• allowing trustees to perform their duties and powers by majority
• recognizing, validating, and regulating non-charitable purpose trusts
• allowing for the use of evidence from outside the trust document for the court to determine a settlor’s intention

Next steps

If passed, Bill 12 will take effect on proclamation.

News

• Making trust legislation work for Albertans (March 29, 2022)