Changes to New Zealand's Trust Legislation
Along with the challenging road ahead, the new Trusts Act 2019 also means that many trusts will not be fit for purpose going forward. The Trusts Act 2019 comes into force on 30 January 2021 and will have a significant impact on the management of trusts. This is the first time in over 65 years that any changes have been made to New Zealand's trust legislation.
Trusts are increasingly coming under scrutiny and trustees are being pursued personally for failing to carry out their administrative duties properly. Trustees can also be held responsible by beneficiaries who think that the trustees have failed to act in their best interests. The new Act aims to provide better guidance and understanding for trustees and beneficiaries by clarifying and simplifying the core trust principles and essential obligations.
The key changes include:
What information must be provided to beneficiaries going forward;
Mandatory duties and obligations of a trustee;
The documents that trustees are now required to always keep;
The extended lifetime of a trust;
An emphasis on better trust management.
People with trusts will need to be prepared for when this new Act takes effect. We want to ensure that your trust is properly managed to lessen the risk of liability and to ensure that the benefits of having a trust are achieved. Therefore, it is important to review the provisions of the trust deed for your trust to ensure that it continues to comply with those law changes and/or any changes in your circumstances.
Please feel free to contact one of our trust team members today – we can help to ensure that you are protected in good times and more difficult times.