Anti-Money Laundering (AML)
By Tammy McLeod
George and Denise had established their trust many years ago. It owned their family home and bach up north. While they were up at the bach over the Christmas break, they decided that it was time to sell, so that they could free up some cash to spend more time travelling overseas. They decided to list the bach for sale with a local real estate agent.
When the real estate agent came to list the property, she asked who the other trustee was and for a copy of the trust deed. She said that this was for “AML” purposes. George and Denise had no idea what AML meant. The agent said AML stood for Anti-Money Laundering and new laws meant that she had to positively ID both George and Denise, their independent trustee and any named beneficiaries of their trust. George and Denise’s other trustee was their long-standing friend, Dave. Dave was currently in Canada skiing for six weeks and wouldn’t be home until the end of February. Their trust had been set up before they had kids and when they looked at the trust deed their nieces and nephews were also named as beneficiaries of the trust and so the agent said she also had to obtain their photo ID and proof of address.
George and Denise were feeling slightly frustrated – all they wanted to do was to sell their bach, but it seemed like there was so much hassle before they could even list it.
The new AML rules which have been in place for banks and other financial institutions for some time now apply to lawyers, accountants and real estate agents. More questions will be asked, and due diligence will need to be carried out on a greater number of people. If you have a trust, there will be greater requirements - the law talks about “enhanced due diligence”.
Unfortunately, this is now the “new normal”. To minimise hassle, this is a good time to review who your independent trustee is (are they going to be easy to get hold of if they need to provide identification documents) and review the list of beneficiaries. It will be frustrating to have to get identification and other details from people who you may never intend to benefit from the trust.