Bill 12 Revamps Alberta’s Trustee Act

Alberta’s recent Bill 12 revamped the Trustee Act.

Why a new act?

One of the key reasons for a new act was to reduce costs and increase clarity.

The old act was mostly concerned with trusts from wills, but trusts are used more broadly. The new act fills gaps by including those broader uses. It also creates default rules so that people setting up trusts don’t have to include every single term; instead, they can rely on the legislation.

The new act implemented recommendations from the Alberta Law Reform Institute. It generally follows a uniform trustee act proposed by the Uniform Law Conference of Canada. This group aims to harmonize laws across Canada.

What about charities?

For charities, the new act makes it easier to vary charitable trusts. It saves them from failing when the original purpose of the trust cannot be met and needs to be applied to a similar purpose. The court can also modify the purpose even where the original purpose hasn’t yet failed.

What’s new?

One quick look at the new Trustee Act and you’ll see it is much more comprehensive. It applies to trusts regardless of their creation date, except where the Act provides otherwise. So what’s new? The Government of Alberta provides a helpful summary of the key changes:

• Trustee’s duty of care: exercise the care, diligence and skill of a person of ‘ordinary prudence’ subject to particular degrees of skills because of the trustee’s profession, occupation or business which requires a greater degree of skill
• Trustee’s duty to report to beneficiaries, respond to beneficiaries’ requests
• Allowing for temporary trustees
• Process to remove unfit trustees
• Process for trustees to resign
• Allowing trustees to act by majority
• Recognizing, validating, regulating non-charitable purpose trusts
• Allowing courts to use evidence from outside the trust document to determine a settlor’s (person who established the trust) intention

For More…

… on charitable trusts and how they differ from charitable corporations, see our Knowledge Base section on Establishing a Canadian Charity.