Status: The Trustee Act received Royal Assent on April 29, 2022
The Trustee Act (formerly Bill 12) makes it more efficient to create and manage trusts while reducing the need to go to court.
The act replaces 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 Trustee Act improves the management of trusts for businesses, decreases administrative burdens on beneficiaries, and reduces the need for court involvement. This results in cost savings for Albertans, and frees up the court’s time and resources.
The Trustee Act modernizes outdated legislation that mainly dealt with trusts under wills. The 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.
The Trustee Act:
- reduces administrative burdens and increases the efficiency of trusts
- lessens the need for court involvement by specifying processes so that, in many instances, trustees and beneficiaries do not need court applications for most matters
- provides a basis for trusts that do not have extensive terms, while making sure people can still set their own terms
- clarifies trustees’ duties and their accountability to improve protection for beneficiaries
- decreases the number of matters going to court resulting in cost savings in legal fees for Albertans, businesses and frees up court resources
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
The Trustee Act will take effect on proclamation.
- Making trust legislation work for Albertans (March 29, 2022)
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