Proposed Changes to NZ Trust Law
A new Trustees Act 2017 is currently before Parliament to replace the Trustee Act 1956 and the Perpetuities Act 1964. The aim of the new Act is to provide better guidance and understanding for trustees and beneficiaries by clarifying and simplifying the core trust principles and essential obligations. Below we have outlined the key elements of the Trustee Act. It is important that existing trustees are aware of these changes in anticipation of its introduction. Please contact a member of our Trusts Team with any questions, or for further information.
The duties of a trustee:
The following will be the mandatory duties of trustees:
- The duty to know the terms of the trust;
- The duty to act in accordance with the terms of the trust;
- The duty to act honestly and in good faith;
- The duty to hold or deal with the trust property, and otherwise act, for the benefit of the beneficiaries or for the permitted purpose;
- The duty to exercise the powers of a trustee for a proper purpose.
The information that must be given to beneficiaries:
Basic trust information must be given to all beneficiaries of the trust. This will include:
- The fact that the person is a beneficiary of the trust;
- The name and contact details of the trustees;
- Details of any appointment, removal, or retirement of a trustee;
- The right of the beneficiary to request a copy of the terms of the trust or trust information.
Other information that beneficiaries can request:
Beneficiaries will also be able to request from the trustee’s information regarding the terms of the trust, the administration of the trust or the trust property, that is reasonably necessary for the beneficiaries to have the trust enforced.
The documents that must be kept by each trustee:
Each trustee will have to keep (so far that it is reasonable) the following:
- The trust deed and any other document that contains terms of the trust:
- Any variations made to the trust deed or trust;
- Records of the trust property that identify the assets, liabilities, income, and expenses of the trust and that are appropriate to the value and complexity of the trust property;
- Any records of trustee decisions made during the trustee’s trusteeship;
- Any written contracts entered into during that trustee’s trusteeship;
- Any accounting records and financial statements prepared during that trustee’s trusteeship;
- Documents of appointment, removal, and discharge of trustees (including any court orders appointing or removing trustees);
- Any letter or memorandum of wishes from the settlor;
- Any other documents necessary for the administration of the trust;
- Any documents referred to previously that were kept by a former trustee during that person’s trusteeship and passed on to the current trustee.
If you would like more information about the impact these proposed changes might have on your trust, then please feel free to contact or book an appointment with a member of our team, or phone us on 09 915 4380.