On March 29, 2022, Alberta Minister of Justice and Solicitor General Tyler Shandro introduced Bill 12: Trustee Act (“Bill 12”). If passed, Bill 12 will replace the existing Trustee Act and introduce a complete, modern framework for the administration and management of trusts in Alberta, including personal trusts, charitable trusts and trusts used as business vehicles.
Over the past several decades, the use of trusts has expanded significantly beyond the traditional concept of personal and testamentary trusts to include business applications (e.g. real estate investment trusts or oil and gas royalty trusts) and charitable applications (e.g. public or private foundations and other charitable trusts). Alberta’s trust legislation has not kept pace: the current Trustee Act, which largely deals with trusts created under a will (i.e. testamentary trusts), is frequently criticized as outdated and prone to causing administrative challenges in the day-to-day operations of trusts.
Bill 12 is intended to modernize Alberta’s trust legislation, including by:
- Reducing complexity and administrative burdens and increasing efficiency for trusts;
- Reducing the need for court intervention in the administration and management of trusts and easing pressure on limited court resources by reducing the number of matters going to court; and
- Clarifying trustees’ duties and their accountability, with a view to ensuring that the interests of beneficiaries are protected.
Bill 12, which is modelled on the Uniform Trustee Act created by the Uniform Law Conference of Canada and recommended for adoption by the Alberta Law Reform Institute, contains many new provisions. These new provisions can be generally grouped into the following categories:
Increased transparency, accountability and beneficiary protection, e.g.
- A new duty of care provision for trustees, which is intended to provide increased consumer protection and bring trustee duties in line with the duties required of estate administrators;
- A duty to report to beneficiaries, including the duty to be responsive to beneficiary requests for information;
Greater ability to change or replace trustees, e.g.
- The ability to remove an unfit trustee;
- The ability for a trustee to resign; and
- The ability to appoint a temporary trustee when a trustee is temporarily absent or incapacitated.
Recognition of non-charitable purpose trusts, e.g.
- New rules to validate and regulate non-charitable purpose trusts, which are largely absent from the existing legislative framework
Expansion of administrative powers, e.g.
- An ability for trustees to exercise their power and authority by majority;
- An increased ability to buy or sell trust property; and
- An express ability to delegate certain functions of trustees.
Bill 12, which has passed its first reading, represents a welcome step away from Alberta’s current outdated and administratively burdensome trust legislation. If passed, the new Trustee Act will ensure that trustees’ duties are clear and easy to understand, provide greater clarity and transparency for beneficiaries, reduce administrative complexity and reduce the expense associated with setting up and operating a trust in Alberta.
CARSCALLEN LLP’S WILLS, TRUSTS, ESTATES, AND ESTATES LITIGATION EXPERTISE
Our team of wills, trusts and estates lawyers has the necessary expertise to help you when it comes to planning for the future of your business and your personal life. Our lawyers also have extensive experience litigating estate disputes at all levels of Court in Alberta, and can help you navigate the appropriate channels to resolve any disputes that may arise.
With entrepreneurial backgrounds, our lawyers will take the time to get to know you and your goals, in order to give you comprehensive, personalized and focused wills and estates advice. If you have any questions about how the proposed new Trustee Act could impact you, your family or your business, or any other questions about trusts, please contact any member of our Wills, Trusts, Estates, and Estate Litigation team for more information.
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