Trusts are an important part of New Zealand society and the economy. It’s estimated there are between 300,000 to 500,000 trusts in New Zealand.
The Trusts Act received Royal assent on 30 July 2019. The Act updates and improves the general law governing trusts for the first time in more than 60 years.
The Act provides better guidance for trustees and beneficiaries, and makes it easier to resolve disputes. Generally, the reforms clarify core trust concepts, make trust legislation more useful, fix practical problems and reduce costs. It also aims to modernise outdated language and concepts.
The changes include:
a description of the key features of a trust to help people understand their rights and obligations
mandatory and default trustee duties (based on established legal principles) to help trustees understand their obligations
requirements for managing trust information and disclosing it to beneficiaries (where appropriate), so they are aware of their position
flexible trustee powers, allowing trustees to manage and invest trust property in the most appropriate way
provisions to support cost-effective establishment and administration of trusts (such as clear rules on the variation and termination of trusts)
options for removing and appointing trustees without having to go to court to do so.
The Act will take effect 18 months after the date on which it received Royal assent.