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Trusts are an important part of New Zealand society and the economy. It’s estimated there are currently between 300,000 and 500,000 trusts in Aotearoa.
The new Trusts Act 2019 (the Act) will take effect on 30 January 2021. The Act updates and improves the law governing trusts for the first time in more than 60 years. It will apply to all existing trusts in New Zealand, as well as any trust created on or after 30 January 2021.
This page provides some general information about the changes for people who use trusts, such as trustees or beneficiaries. However, you may want to talk to your lawyer about what the changes may mean for your trust.
Read a copy of the Trusts Act 2019(external link)
The basic rules of trusts stay the same
The Act doesn’t significantly change the underlying law, so the basic rules of a trust will stay the same.
The Act clarifies the trustee’s role
The Act explains the nature of a trust and the role of a trustee in clear and modern language.
For example, the Act sets out:
Clarifying the trustee role could mean in practice trustees need to widen their current level of responsibility. For example, the Act makes it clear that trustees need to be actively involved in trust administration. A trustee will also need to proactively disclose information in some cases.
The Act makes it easier to administer trusts
The Act supports trustees to more efficiently administer trusts and reduce the need to take matters to court. For example, the Act includes:
The Act clearly sets out the legal duties of a trustee.
Some trustee duties, known as 'mandatory duties', are compulsory and apply to all trusts. Under these duties, all trustees must:
Other trustee duties, known as 'default duties' also apply, but aren’t compulsory and can be modified or excluded by the trust. These duties apply unless the trust specifies that they don’t, or that they are modified, or it is otherwise implied that this is the case. Under these duties, trustees must:
All trustees must hold a copy of the trust deed and any document that contains the terms of the trust and any variations made to the trust deed.
At least one trustee must hold:
Once the trusteeship ends, the trustee must pass on the documents to at least one new or continuing trustee.
The Act sets out a presumption that basic trust information should be provided to beneficiaries. Basic trust information is:
The Act also sets out a presumption that information should be provided to beneficiaries on request.
These presumptions mean that the starting point is that information should be made available. However, before giving out basic trust information, or information on request, the trustee must consider the factors set out in section 53 of the Act. If, after doing so, the trustee considers that the information should not be made available to every beneficiary, then the trustee may withhold the information.
Read section 53 of the Trusts Act 2019(external link)
Trustees and beneficiaries should familiarise themselves with their rights and obligations under the new Act.
If you have a trust, or are thinking about setting up a trust, you may want to talk to your lawyer about what the changes may mean for you and whether changes should be made to your trust deed in light of the new Act.
Lawyers practising in trust law can be found on the New Zealand Law Society | Te Kāhui Ture o Aotearoa’s website: https://www.lawsociety.org.nz/for-the-public/get-legal-help/(external link).
This page was last updated: