Comprehensive Analysis of Key Differences Between the Trusts Act 1973 and Trusts Bill 2025 in Queensland prepared by TrustEasy Team with the help of AI based research tools:
Queensland Government announced this yesterday (1st of May 25):
“Trust laws modernised after half a century
- Trusts Bill 2025 passed in Parliament, modernising Queensland legislation.
- New bill replaces outdated Act that was introduced more than 50 years ago.
- Gives effect to recommendations made by the Queensland Law Reform Commission. ….”
We decided to make Queenslander understand the difference:
The Trusts Bill 2025 represents a transformative shift in Queensland’s trust law framework, modernizing provisions that had remained largely unchanged since the Trusts Act 1973 came into force. This overhaul addresses structural gaps, incorporates contemporary legal standards, and streamlines administrative processes. Below is a detailed examination of the principal differences between the two legislative instruments.
Modernization of Trustee Duties and Responsibilities
Codification of Core Statutory Duties
Under the Trusts Act 1973, trustee obligations were primarily derived from common law principles, such as the duty to act in beneficiaries’ best interests and to exercise prudence in investments. The Trusts Bill 2025 codifies these principles into statutory mandates, introducing explicit “core duties” that include:
- A general duty of care requiring trustees to act with the diligence and skill of a prudent person.
- A duty to maintain accurate trust accounts and provide them to beneficiaries upon request.
- A duty to act honestly and in good faith, aligning with fiduciary responsibilities under modern equity law.
These codified duties reduce reliance on judicial interpretation and provide clearer guidance for trustees.
Enhanced Investment and Delegation Powers
The 1973 Act granted trustees powers to manage trust property but lacked specificity on delegation. The 2025 Bill explicitly permits trustees to delegate functions to agents, custodians, or investment managers, provided they exercise oversight. This aligns with contemporary practices in asset management and reflects recommendations from the Queensland Law Reform Commission (QLRC).
Trustee Appointment and Removal Mechanisms
Eligibility Restrictions
The 1973 Act did not explicitly prohibit certain individuals from serving as trustees. In contrast, the 2025 Bill disqualifies:
- Children (even if appointment is conditional on attaining majority).
- Insolvent individuals or entities under corporate insolvency regimes.
- Persons disqualified by court order under Clause 168, which allows courts to remove unfit trustees from all trusts they manage.
These restrictions mitigate risks of mismanagement and align with safeguards in other jurisdictions.
Streamlined Replacement Processes
Under the 1973 Act, replacing a trustee with impaired capacity required court intervention, often causing delays. The 2025 Bill introduces mechanisms allowing:
- Administrators or attorneys of a trustee with impaired capacity to appoint replacements without court orders.
- Insolvent trustees to appoint their own replacements, ensuring continuity in trust administration.
This reduces administrative burdens and costs, particularly for family trusts where incapacitation of a sole trustee could paralyze operations.
Administrative and Operational Reforms
Increased Capital for Beneficiary Maintenance
The 1973 Act set fixed monetary limits for trustees to apply trust capital toward beneficiary maintenance, education, or advancement. The 2025 Bill modernizes these thresholds to reflect inflationary adjustments and contemporary living costs. For example, the capital amount that may be advanced without court approval has been substantially increased, though exact figures await regulatory specification.
Simplified Cy-Près Schemes for Charitable Trusts
The 1973 Act required all cy-près schemes (modifications to charitable trusts when original purposes become impractical) to undergo court approval. The 2025 Bill permits trustees of smaller charitable trusts (within the District Court’s monetary jurisdiction) to seek approval directly from the Attorney-General, bypassing lengthy court processes. This subdivision also mandates public notification and appeal rights to balance efficiency with beneficiary interests.
Judicial and Procedural Changes
Expanded Jurisdiction of Lower Courts
Historically, the Supreme Court held exclusive jurisdiction over trust disputes under the 1973 Act. The 2025 Bill empowers the District Court to adjudicate matters within its monetary limits, enabling cost-effective resolution of smaller disputes. This aligns with reforms in New Zealand’s Trusts Act 2019 and reduces caseload pressures on higher courts.
Court Oversight of Trustee Remuneration
While the 1973 Act allowed trustees to claim “reasonable” remuneration, the 2025 Bill grants courts explicit authority to review and reduce excessive fees or professional charges. This safeguards beneficiaries against exploitative practices and codifies existing equitable principles.
Structural and Definitional Updates
Broadened Definition of Trust Property
The 2025 Bill expands the scope of trust property to include:
- Assets held under bare, constructive, or resulting trusts.
- Land subject to personal residence licenses.
- Estates of deceased persons administered through trusts.
This clarifies ambiguities in the 1973 Act, which focused narrowly on traditional trust structures.
Elimination of Obsolete Provisions
The 2025 Bill repeals archaic sections of the 1973 Act, such as those governing investments in bearer securities and restrictive land covenants, which had become irrelevant due to financial market evolution and property law reforms.
Conclusion: Toward a Modern Trusts Framework
The Trusts Bill 2025 addresses systemic shortcomings in Queensland’s trust regime by introducing structured duties, streamlining administrative processes, and enhancing judicial oversight. By incorporating QLRC recommendations and aligning with international trends, the legislation balances efficiency with robust beneficiary protections. These reforms mark a significant departure from the 1973 Act’s reliance on common law and reactive amendments, positioning Queensland’s trust law for 21st-century challenges.
Myna Australia Pty Ltd team is confident that it already is meeting the accurate trust records requirements but will investigate further Part 5, Division 4 of the Trusts Bills 2025 and update TrustEasy, BuildTrust and TrustSoft based wherever necessary along with the upcoming AML/CTF changes for trustees based in Queensland. These are the main areas we’ll assess all our software products:
Explicit Record-Keeping Mandates
Under the Trusts Act 1973, requirements for maintaining trust accounts were primarily addressed in the Trust Accounts Regulation 1999, which focused on public accountants managing client funds. The Trusts Bill 2025 elevates these obligations to statutory status, imposing a universal duty on all trustees to maintain accurate, up-to-date records of:
- All trust property transactions, including income, expenditures, and capital distributions.
- Decisions related to investments, asset allocations, and beneficiary distributions.
- Communications with beneficiaries regarding financial matters.
This codification eliminates ambiguity about whether non-professional trustees (e.g., family trust managers) must adhere to formal accounting standards.
Modernized Audit Requirements
While the 1973 framework required annual audits for accountant-managed trust accounts, the 2025 Bill introduces tiered audit thresholds based on trust size and complexity. Key changes include:
- Small Trusts: Exemption from mandatory audits if annual transactions fall below a prescribed monetary threshold (awaiting regulatory specification).
- Large Trusts: Requirement for audits conducted by ASIC-registered auditors, with stricter independence criteria for auditors.
- Digital Submission: Mandatory electronic filing of audit reports to the Department of Justice, replacing paper-based processes.
These reforms reduce administrative burdens for small trusts while strengthening oversight of larger estates.
Beneficiary Rights and Transparency
Expanded Access to Financial Information
The 1973 Act provided no statutory right for beneficiaries to inspect trust accounts. The 2025 Bill establishes:
- On-Demand Access: Beneficiaries may request copies of trust accounts within 30 days, unless a court order restricts disclosure.
- Standardized Reporting: Trustees must provide annual financial summaries using templates prescribed by regulation, ensuring consistency across trusts.
- Redaction Protections: Trustees may withhold commercially sensitive details (e.g., specific investment strategies) but must justify redactions in writing.
This shift empowers beneficiaries to monitor trust administration without requiring court intervention.
Enhanced Accountability for Distributions
Clause 85 of the Bill introduces rigorous documentation requirements when trustees distribute capital or income, including:
- Pre-Distribution Notices: Written explanations of how distributions align with trust purposes and beneficiary interests.
- Equitability Assessments: Mandatory records demonstrating consideration of all beneficiaries’ present and future needs.
- Anti-Clawback Protections: Detailed paper trails to shield trustees from liability if distributions are later contested.
These provisions address historical gaps where trustees could make discretionary payments without adequate justification.
Technological Integration
Digital Record-Keeping Standards
The 2025 Bill mandates that trustees maintain accounts using software compliant with Australian Taxation Office record-keeping requirements, including:
- Immutable Audit Trails: Systems must log all changes to financial records with timestamps and user identifiers.
- Interoperability: Accounts must be exportable in formats acceptable to courts and regulators (e.g., XBRL or PDF/A).
- Cybersecurity: Encryption of digital records and multi-factor authentication for access, aligning with ASIC Regulatory Guide 271.
These requirements modernize the 1973 framework, which lacked specific technological standards.
Conclusion: Balancing Efficiency and Accountability
The Trusts Bill 2025 transforms trust accounting from a reactive compliance task into a proactive governance mechanism. By mandating digital integration, formalizing beneficiary rights, and introducing risk-based audit requirements, Queensland’s reforms align with global trends in fiduciary oversight while preserving flexibility for small trusts. These changes address critical weaknesses in the 1973 regime, where inconsistent record-keeping practices often led to protracted disputes and eroded beneficiary confidence.
Dinesh Choradiya CPA
TrustEasy – Trust Accounting Software for Tax Practitioners
https://trusteasy.com.au/
