The Ontario government has tabled legislation to protect untiholders of publicly traded trusts from personal liability.

As the popularity of investing in trusts has grown with retail investors, unitholders have been seeking the kind of legal protection from personal liability that corporate shareholders have traditionally had.

Under the proposed legislation, the Trust Beneficiaries’ Liability Act, 2004, unitholders would not be held liable for any of the obligations or liabilities of the trusts — after the Act is passed and comes into force. This protection is expected to extend to untiholders of income trusts, REITs, and mutual funds.

Alberta has already passed similar legislation. It is due to come into effect on July 1, 2004.