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Attorney-General urges review of trust beneficiary liability
Attorney-General Mark Speakman has called for the NSW Law Reform Commission to review the state’s laws relating to the liability of beneficiaries of trusts.
Emma Musgrave
Mr Speakman said the review has become paramount due to the increasing confusion surrounding trust beneficiary liability.
“Trusts often involve individuals or businesses investing in a common asset - such as a large property, infrastructure project or shareholding - that is administered by a trustee,” Mr Speakman said.
Mr Speakman said the NSW Law Reform Commission will examine three important factors.
The first, he noted, is whether there is a need to introduce laws to limit or remove the liability of beneficiaries to indemnify trustees or creditors when trustees fail to meet the obligations of the trust.
Secondly, the commission will examine whether it is appropriate to restrict the liability of investors to the amount outstanding on their share of the investment, in the same way as holders of fully paid shares have no further liability.
Finally, the commission will examine whether oppression remedies available to shareholders under company law should be extended to beneficiaries of trading trusts.
“The government wishes to ensure trust beneficiaries are protected in appropriate cases, but not provide an opportunity for company directors to avoid responsibility for insolvent trading,” Mr Speakman said.
According to a statement, the NSW Law Reform Commission is due to report to the state government by 30 April 2018.
Emma Musgrave
Emma Musgrave (née Ryan) is the managing editor, professional services at Momentum Media.
Emma has worked for Momentum Media since 2015, including five years spent as the editor of the company's legal brand - Lawyers Weekly. Throughout her time at Momentum, she has been responsible for breaking some of the biggest stories in corporate Australia. In addition, she has produced exclusive multimedia and event content related to the company's respective brands and audiences.
Prior to joining Momentum Media, Emma worked in breakfast radio, delivering news to the Central West region of NSW, before taking on a radio journalist role at Southern Cross Austereo, based in Townsville, North Queensland.
She holds a Bachelor of Communications (Journalism) degree from Charles Sturt University.
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