Trust Beneficiaries: Rights and Expectations

If you have been named in a trust, the first question is practical: what can you actually demand? Trust beneficiary rights in Mauritius come from three layers: the Trusts Act 2001, the terms of the trust deed, and the general principles of equity that a court applies when a trustee is challenged. This page explains what a beneficiary of a trust in Mauritius can ask for, what they can see and what they can enforce, and where the rights end.

It gives general information only. The exact position of a given beneficiary depends on the wording of the deed and on the facts, so it should be confirmed by an adviser who has read the documents.

Who counts as a beneficiary

A beneficiary is a person, or a class of persons, for whom the trustee holds the trust property. The deed may name individuals ("my daughter"), describe a class ("my grandchildren, born or yet to be born") or leave the choice to the trustee within a defined group.

The position differs sharply by type of trust:

• Fixed interests. The deed gives each beneficiary a defined share or entitlement. The beneficiary can point to the deed and say what is owed. See discretionary vs fixed trust.
• Discretionary interests. The trustee decides who benefits, when and how much. A beneficiary has a right to be properly considered, not a right to a payment. See discretionary trust.
• Contingent interests. The entitlement depends on an event, such as reaching a stated age. Until then, the person has a hope, protected by the trustee's duties, rather than a present claim.

Under section 8 of the Trusts Act 2001, a settlor may also be a trustee, beneficiary, protector or enforcer, but cannot be the sole beneficiary of the trust they created. A settlor who is also a beneficiary therefore shares the position of the other beneficiaries in respect of that interest. The role of the settlor is a separate matter.

A Mauritian foundation works differently: its charter sets out the beneficiary or the way a beneficiary is designated, and the founder may be a beneficiary. The Foundations Act governs those rights, not the Trusts Act.

What a beneficiary can ask for

Administration according to the deed

The core right is that the trustee follows the deed and the law. A beneficiary can expect the trustee to hold the assets separately from their own, to invest and manage them with care, to act impartially between beneficiaries and to avoid putting their own interest ahead of the trust. These duties are explained in duties of a trustee.

Consideration of discretionary powers

Where the trustee has a discretion, the right is to have it exercised in good faith, for the purposes the deed intends and after relevant matters have been weighed. A trustee who ignores a letter of wishes is not automatically in breach, because such a letter guides rather than binds, but a trustee who never considers a beneficiary at all may be.

Information

Information is the point on which beneficiaries are most often disappointed. The law does not give every beneficiary an automatic right to every document. What can be requested depends on the deed, on the nature of the interest and on the Act.

Some of the records that exist give an idea of what is held about you:

• The trustee must keep up-to-date accounts and documents, together with an alphabetical register of the names and last known addresses of each beneficiary and settlor (Trusts Act 2001, section 38(3)). Accounting records must be kept for at least 5 years after the operations concerned are completed.
• A qualified trustee must keep a register of each trust it administers, which the FSC can call for (Financial Services Act 2007, section 29).
• The FSC itself holds a register of trusts with a qualified trustee, which includes the identity and addresses of beneficiaries (Financial Services Act 2007, section 26A). That register is a supervisory tool, not a public search facility. See the register of trusts.

A beneficiary who wants to know whether they are one, or wants documents, can follow the steps in how to find out if you are a beneficiary and how a beneficiary can request trust information.

Confidentiality works in both directions

Section 33 of the Trusts Act 2001 (as rewritten in 2019) requires the trustee to keep information about the trust confidential. A court orders disclosure only on the application of an investigating authority, where the information is required in good faith for an investigation or proceedings concerning financial crime. This protects the family from outsiders, but it also means a beneficiary cannot assume that trust information will be handed over simply because they ask. See trust confidentiality.

Rights, limits and who holds them

Enforcing the trust

If the trustee fails in a duty, a beneficiary can ask a court to intervene. The remedies and the practical steps are covered in breach of trust, and the grounds on which the trust itself may be attacked are covered in challenging a trust. Before litigation, a written request to the trustee, setting out what you ask for and why, is often the sensible first step and creates a record.

The role of the protector and enforcer

Many trusts add an independent person who can act without going to court. Under section 24 of the Trusts Act 2001, a protector may, unless the deed says otherwise, remove and appoint trustees, fix the governing law, change the place of administration and withhold consent to certain acts, without becoming a trustee. A beneficiary who is unhappy with a trustee may find that the quickest route is to the protector. See powers of a trust protector.

An enforcer is a different office. It is central to a purpose trust, which exists without beneficiaries (section 19). Under section 21, the enforcer is entitled to the trust's annual accounts, a copy of the trust deed and any legal advice received by the trustees, and the same person cannot be trustee and enforcer of one trust. Where the enforcer of a purpose trust has died, refuses or can no longer act, the qualified trustee must notify the Attorney-General in writing, and the Attorney-General appoints the successor named in the deed or, failing that, a suitable person within 90 days.

Spendthrift and protective clauses

Section 18 of the Trusts Act 2001 recognises protective (spendthrift) trusts. A beneficiary's interest may be made subject to termination, to restrictions on transfer, or to suspension if the beneficiary becomes insolvent or their property is seized. If you are a beneficiary under such a clause, your rights are real but conditional. See spendthrift trusts and protective trusts.

How the trustee's own obligations affect you

Professional trustees in Mauritius operate under anti-money-laundering rules that sometimes surprise beneficiaries.

• A qualified trustee is a person that the FIAMLA treats as a reporting person. It must carry out customer due diligence and report suspicious transactions. Knowingly supplying false customer due diligence information is a criminal offence.
• For a trust-type legal arrangement, the beneficial owners include the settlor, the trustee, any protector, each beneficiary (or the class of beneficiaries and the objects of a power) and any other individual exercising ultimate effective control.
• The FSC publishes Practice Notes for qualified trustees on keeping beneficial ownership information accurate and up to date.

In practice, a beneficiary can expect to be asked for identity documents and, from time to time, for updated details. Refusing may delay a distribution. A trustee that holds an account must also tell the bank it is acting as a trustee when opening it, under section 17C(5A) of the FIAMLA.

What a beneficiary should not expect

• A guaranteed income. In a discretionary trust, the trustee can decide that no distribution is made in a given year.
• Control of the assets. The trustee holds legal title and manages the property. The beneficiary's right is to proper administration.
• Permanence of the terms. A trust is presumed irrevocable by the settlor unless the deed expressly reserves a power of revocation (section 11). The terms can still change through the mechanisms the deed or a court allows. See changing the terms of a trust.
• Unlimited duration. A trust other than a purpose trust is limited to 99 years from creation unless it ends earlier (section 9), and accumulation of income is capped at 25 years where the trust holds Mauritian immovable property (section 10).
• Tax answers on this page. Distributions to beneficiaries have their own tax treatment, covered in tax on distributions to beneficiaries. Section 46(4) of the Income Tax Act treats a distribution to a beneficiary of a trust as a dividend in the beneficiary's hands.

Practical steps for a beneficiary

• Obtain the identity of the trustee and confirm it is a qualified trustee
• Ask in writing whether you are a beneficiary and in what capacity
• Request a copy of the relevant parts of the trust deed
• Ask for the latest accounts, noting that the right may depend on the deed
• Check whether the deed names a protector, and what that person can do
• Keep a dated record of every request and reply
• Take advice before starting any court proceedings

If you want a conversation about your own position, you can contact us through the site form, and the request will be passed to a FSC-licensed corporate service provider (Management Licence).