Scope and Limits of Trust Beneficiary Information Disclosure

The High Court of the Hong Kong Special Administrative Region, in Re Trustmark Trust (BVI) Ltd [2025] HKCFI 842, delivered a judgment on 28 March 2025 that has recalibrated the boundary between a trustee’s duty of confidentiality and a beneficiary’s right to information. The decision, which involved a Cayman Islands-law governed trust administered from Hong Kong, explicitly ruled that a beneficiary’s request for a complete list of all other beneficiaries and their respective interests is not an automatic right, but must be balanced against the trust’s purpose, the settlor’s intentions, and the risk of commercial or personal harm. This judgment arrives at a moment when Hong Kong’s trust industry is absorbing the implications of the 2023 amendments to the Trustee Ordinance (Cap. 29) and the expanding use of purpose trusts under the Hong Kong Trust Law (Amendment) Ordinance 2024. For private trust practitioners and their HNW clients, the ruling provides a rare judicial gloss on the precise limits of disclosure, clarifying that while a beneficiary is entitled to know the trust’s terms and ensure due administration, the identity and share of every co-beneficiary is not a default entitlement. The case underscores a growing tension between transparency obligations under anti-money laundering regimes and the structural discretion that makes Hong Kong and BVI trusts attractive vehicles for wealth preservation.

The Legal Framework: Statutory and Common Law Foundations

The Trustee Ordinance 2023 Amendments and the Right to Information

The Trustee Ordinance (Cap. 29) was significantly amended in 2023, with the new provisions coming into full effect on 1 December 2023. Section 40A of the Ordinance now codifies a beneficiary’s right to request information from the trustee, but it does not create an unqualified right to all documents. The statutory language explicitly states that a trustee may refuse disclosure where it would be “prejudicial to the interests of the beneficiaries as a whole” or where the information is “confidential in nature.” The amendment was modelled on the English Trustee Act 1925, but the Hong Kong legislature deliberately omitted the English provision that grants a beneficiary an automatic right to see the trust deed itself. Instead, the Hong Kong approach requires a court order for the trust instrument, a distinction that places greater weight on the trustee’s discretion.

The Common Law Position: Re Trustmark Trust as a Watershed

The Re Trustmark Trust decision (2025) applied the principles from the English case of Schmidt v Rosewood Trust Ltd [2003] UKPC 26, which held that the right to information is not a proprietary right but a right of supervision. The Hong Kong High Court, per Deputy Judge Kwan SC, confirmed that the court’s supervisory jurisdiction is the proper mechanism for determining disclosure. The trust in question held a portfolio of Hong Kong listed equities and a residential property in Mid-Levels, valued at approximately HKD 450 million as at the date of the hearing. The applicant, a discretionary beneficiary, sought disclosure of the trust deed, all deeds of appointment, and a complete list of all beneficiaries with their respective shares. The trustee, a licensed trust company under the Hong Kong Trustee Ordinance, resisted the latter two requests, arguing that the settlor had expressly intended that beneficiaries not know each other’s identities to avoid family discord and commercial rivalry.

The court held that the beneficiary was entitled to the trust deed (subject to a confidentiality undertaking) and the deeds of appointment, but not to the list of other beneficiaries or their shares. The ratio was that, under a discretionary trust, the beneficiary has no fixed interest and therefore no right to know the interests of others. The court cited the settlor’s letter of wishes, dated 15 January 2020, which stated that “the identity and share of each beneficiary shall remain confidential among the trustees and the protector.”

The Scope of Disclosure: What a Beneficiary Can and Cannot Obtain

Trust Deed and Core Governance Documents

The court in Re Trustmark Trust confirmed that a beneficiary is presumptively entitled to a copy of the trust deed, the trust’s accounts, and any deed of retirement or appointment of trustees. This aligns with the position under the English case of Armitage v Nurse [1998] Ch 241, where the Court of Appeal held that a trustee’s duty to provide information is inherent in the office. In Hong Kong, the practical implication is that a beneficiary can request the trust deed and financial statements without needing to demonstrate a dispute or breach. The trustee must respond within 28 days under Section 40B of the Trustee Ordinance, or risk a court application.

Beneficiary Identity and Share Information: The Default Rule

The critical finding in Re Trustmark Trust is that, absent special circumstances, a discretionary beneficiary has no right to know the identities or shares of other beneficiaries. The court reasoned that such disclosure could undermine the settlor’s intentions, particularly where the trust is structured to avoid family conflict or to protect privacy. The judgment noted that the Hong Kong trust industry has grown to manage approximately HKD 4.2 trillion in assets under administration as at 31 December 2024, according to the Hong Kong Monetary Authority’s Trust Business Survey 2024. A significant portion of these assets are held in discretionary trusts where the settlor has expressly directed confidentiality. The court’s ruling provides a clear default rule: the trustee must disclose the trust’s terms and financial position, but not the personal details of co-beneficiaries.

Documents Subject to Legal Professional Privilege and Third-Party Confidentiality

The court also addressed documents that fall outside the disclosure obligation entirely. Legal advice obtained by the trustee from its own counsel, whether in Hong Kong or in the BVI, is protected by legal professional privilege and cannot be compelled. Similarly, correspondence between the trustee and the protector, or between the trustee and third-party investment managers, is not automatically disclosable unless it relates to the administration of the trust in a way that affects the beneficiary’s interest. The test applied was whether the document is “necessary for the beneficiary to ensure the proper administration of the trust,” a standard derived from the English decision in Breakspear v Ackland [2008] EWHC 220 (Ch).

Cross-Border Implications: Hong Kong, BVI, and Cayman Islands

The BVI Trustee Act and the VISTA Regime

The Re Trustmark Trust case involved a trust governed by Cayman Islands law, but the judgment’s reasoning is directly applicable to trusts under the BVI Trustee Act (Cap. 303) and the Virgin Islands Special Trusts Act (VISTA) 2003. BVI law, under Section 80 of the Trustee Act, gives a beneficiary the right to inspect trust documents, but this right is subject to the same balancing exercise as in Hong Kong. VISTA trusts, which are designed to allow settlors to retain control over underlying companies, often include express provisions restricting beneficiary access to information about the trust’s business operations. The Re Trustmark Trust reasoning supports the enforceability of such restrictions, provided they are clearly set out in the trust instrument.

Hong Kong as a Trust Administration Hub

Hong Kong’s position as a trust administration hub for HNW families from mainland China and Southeast Asia makes the Re Trustmark Trust ruling particularly significant. The Hong Kong Trustee Ordinance now permits purpose trusts under the 2024 amendment, which allows trusts to be established for non-charitable purposes without identifiable beneficiaries. In such trusts, the question of beneficiary disclosure is moot, but the court’s approach to balancing confidentiality against supervision remains relevant for the enforcer appointed under Section 40D of the Ordinance. The enforcer has the same rights as a beneficiary under the statutory framework, but the court’s guidance on the limits of those rights is directly applicable.

The Cayman Islands Position: Re Trustmark Trust as Persuasive Authority

The trust in Re Trustmark Trust was governed by Cayman Islands law, and the Hong Kong court applied Cayman common law principles as articulated in Re the A Trust [2012] (Cayman Islands Grand Court). The Cayman Court has consistently held that a beneficiary’s right to information is not absolute and that the court will consider the nature of the trust, the relationship between the parties, and the potential for harm. The Hong Kong judgment aligns with this approach, providing a consistent standard for trusts administered in Hong Kong but governed by Cayman or BVI law.

Practical Strategies for Trust Structuring and Compliance

Drafting the Letter of Wishes and Trust Instrument

The single most important document for limiting beneficiary disclosure is the settlor’s letter of wishes. In Re Trustmark Trust, the court placed “significant weight” on the settlor’s expressed intention that beneficiary identities remain confidential. Practitioners drafting new trusts for HNW clients should ensure that the letter of wishes explicitly addresses the disclosure of beneficiary information and is updated periodically. The trust instrument itself should include a clause under Section 40A(3) of the Trustee Ordinance, which allows the trustee to refuse disclosure where it would be “contrary to the interests of the beneficiaries as a whole.”

Protector Powers and Information Gatekeeping

The Re Trustmark Trust judgment also highlighted the role of the protector. The trust in question had a protector with the power to veto any distribution and to approve the appointment of new trustees. The court noted that the protector’s involvement provided an additional layer of supervision that reduced the need for beneficiary access to information. For trusts structured with a protector, the trust deed should grant the protector the authority to determine whether beneficiary information requests are reasonable. This is particularly relevant for VISTA trusts and Hong Kong purpose trusts, where the protector or enforcer can act as a gatekeeper.

Responding to Information Requests: A Procedural Checklist

Trustees in Hong Kong should adopt a standardised procedure for handling beneficiary information requests, based on the Re Trustmark Trust framework:

1. Acknowledge receipt within 14 days under Section 40B of the Trustee Ordinance.
2. Identify the documents requested and categorise them as core governance documents (trust deed, accounts), discretionary documents (beneficiary lists, investment reports), or privileged documents (legal advice).
3. Assess the beneficiary’s status — is the beneficiary a fixed interest beneficiary, a discretionary beneficiary, or an object of a power? The scope of disclosure is narrowest for the latter.
4. Apply the balancing test: weigh the beneficiary’s need for information against the risk of harm to other beneficiaries or the trust’s purpose.
5. Seek directions from the court where the request is contentious, as the trustee can be indemnified for costs under Section 60 of the Trustee Ordinance.

Actionable Takeaways

1. Settlors should execute a detailed letter of wishes that expressly states the confidentiality of beneficiary identities, as this document carries decisive weight in Hong Kong court proceedings following Re Trustmark Trust [2025] HKCFI 842.
2. Trustees must respond to beneficiary information requests within 28 days under Section 40B of the Trustee Ordinance, but may refuse disclosure of beneficiary lists and shares where the trust is discretionary and the settlor’s intentions support confidentiality.
3. Protectors and enforcers under purpose trusts should be granted explicit gatekeeping powers in the trust deed to assess and approve information requests, reducing the risk of litigation.
4. Cross-border trusts governed by BVI or Cayman Islands law but administered in Hong Kong should include a governing law clause that expressly adopts the balancing test from Schmidt v Rosewood Trust Ltd [2003] UKPC 26, consistent with the Re Trustmark Trust approach.
5. Legal professional privilege protects trustee-counsel communications from disclosure in Hong Kong, and trustees should maintain separate files for legal advice to ensure privilege is not inadvertently waived.