New Limitation Periods for Trust Claims
General information of the reasons for enacting the new statute and what it changes can be found here. This article summarizes only those changes which affect the area of trusts, wills and estates.
Under existing laws, a beneficiary has at least 10 years to commence a claim in a number of circumstances, including one to recover a share of an estate or trust property, or to remedy a fraudulent breach of trust by a trustee. The limitation period does not, however, begin to run until the beneficiary becomes “fully aware of the fraud, fraudulent breach of trust, conversion or other act of the trustee on which the action is based”. Despite that postponement, there is still an ultimate limitation period of 30 years for a number of claims, including those relating to an estate or trust.
Under the new statute, a claim to recover trust property or its proceeds, or to remedy a fraudulent breach of trust by a trustee, will have to be commenced within 2 years of the discovery by the beneficiary of his or her loss or the action by the trustee. That short limitation period may still be extended (as it was under the current more generous limitation period) until the beneficiary becomes fully aware of the basis for the claim. The basis for discovery is very similar to that under the old law; that is, the beneficiary must become “fully aware” of the fraud, fraudulent breach of trust, conversion or other act of the trustee. However, the old 30 year ultimate limitation will be reduced to 15 years.
For those readers who have an interest in an estate or trust as a beneficiary, whether present or future, the new Limitation Act may curtain legal remedies available unless the beneficiary exercises due diligence in protecting that interest. At a minimum, beneficiaries should (and are entitled to) request accountings from the executor or trustee from time to time, to satisfy themselves that the estate or trust is being properly administered and the trust property safeguarding. The lawyers at Horne Coupar understand the rights of beneficiaries and trustees, and would be pleased to assist you in these matters.