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A Trust Beneficiary’s Rights When the Trustee Makes a Mistake

Posted by M. Margaret Gonsalves-Sabola | Nov 14, 2018 | 0 Comments

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If you are the beneficiary of a trust and you believe the trustee has made a mistake, you may have questions about your rights in these circumstances. You may think that you have not received money to which you are entitled, or that the trustee is mishandling trust assets, or you may think that the trustee is not giving you important information about the trust. The Supreme Court of The Bahamas considered beneficiaries' right to access information about a trust from the trustee.

The case of Dawson-Damer v Grampian Trust Company Ltd, [2017] 2 BHS J No 126, turned on interpreting Section 83(8) of the Trustee Act 1998. Thesection provides that trustees do not have to disclose certain documents to beneficiaries or others if demanded. The documents include:

  • Documents recording the wishes of the person who formed the trust (the settlor);
  • Records of the trustee or trustees' decisions and deliberations about the trust; or
  • Records discussing the trustees' exercise of discretion concerning the trust – including any legal advice obtained.

However, the applicant in Dawson-Damerargued that a trustee should not be able to use this law to shield himself from disclosing documents or information if he is accused of wrongdoing or breach of fiduciary duties. The applicant did not accuse the particular trustee in the case of fraudulent actions or bad faith, only that the trustee had breached his duties.

In its decision, the court explained that a trustee could not use the protections of Section 83 if a beneficiary could show the trustee's fraud or bad faith. However, merely accusing the trustee of a breach of duty was not enough. In other words, the trustee does have some protection against beneficiaries' discovery of confidential documents under Section 83. If a beneficiary can show actual wrongdoing, however, the trustee may be ordered to turn over documents relating to the wrongdoing.

Beneficiaries of a Bahamian trust who believe that a trustee has breached its duties, acted in bad faith, or behaved fraudulently should seek legal advice to learn more about your right to discovery of documents and information that the trustee claims are “confidential.”

To find out more about beneficiaries' rights inThe Bahamas, visit Gonsalves-Sabola Chambersonline or call the office at +1 242 326 6400.

About the Author

M. Margaret Gonsalves-Sabola

M. Margaret Gonsalves-Sabola is a civil and commercial litigation attorney and an accredited civil and commercial mediator. Margaret has over 21 years' experience in legal practice in the United Kingdom, Jamaica and The Bahamas.

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