Trust Law Changes
The Trusts Act 2019 (“Act”) comes into force on 30 January 2021. It is the first major trust law reform in New Zealand in 70 years. This will bring about many changes in the way New Zealanders administer their trusts for estate and planning purposes.
Many of the changes have been made to increase the accessibility of trust information. This will provide more accountability and transparency of the administration of trusts. The Act will apply to all trusts that are governed by New Zealand law. This includes those created before the commencement of the Act. A few of the changes to the Act include:
- Mandatory duties
The Act contains mandatory duties for all trustees. Mandatory duties cannot be modified or excluded by the trust deed. All trustees will be required to abide by these duties.
- Default duties
Default duties are obligations which the trustees must abide by unless the settlor chooses otherwise when the trust is established.
- Trust documentation
There are new provisions which require trustees to hold copies of all trust documents. These documents must be accessible to all trustees upon request.
- Access to information
As part of the accountability and transparency requirements basic trust information must be made available to all beneficiaries.
If you currently operate a trust we suggest you consider the following questions:
- Do you still need a trust? This is something you may want to consider and consult your accountant on as well as your lawyer;
- Who are the beneficiaries of your trust? You will need to disclose information upon request to the beneficiaries once the new regulations are in place.
- Who are your trustees? You may need to change them if necessary.
- Whether your trust deed may need to be modified or updated.
See the item in our latest Newsletter “Overview of Trusts Act 2019” for a more detailed description.
In contemplation of the above changes, if you have a trust and would like more information on the changes, please arrange an appointment to discuss these points with us so that you are ʻtrust fitʼ by January 2021. There would be no charge for such an initial meeting.