New Zealand’s Trusts Act 2019 came into force on 30 January 2021 and applies to existing and new trusts.
Key changes include:
The Trusts Act 2019 specifies mandatory and default duties of trustees.
Mandatory duties can’t be modified or excluded by the trust deed. All trustees must:
Default duties apply unless they are modified or excluded by the trust deed. They include:
A purpose of the Trusts Act 2019 is to ensure that beneficiaries have sufficient information to enable them to enforce the terms of the trust.
The rules have two parts:
The Trusts Act 2019 contains a presumption that trustees must tell every beneficiary:
The trustees must regularly consider at reasonable intervals whether they should make basic trust information available.
Before providing this information, the trustees must consider the factors in section 53 of the Act. The trustees may decide to withhold some or all the information from one or more beneficiaries or classes of beneficiaries, if they reasonably consider that the information should not be made available.
The section 53 factors are:
Trustees must consider the above factors carefully and in compliance with their trustee duties. We recommend that trustees seek legal advice before deciding to withhold information from a beneficiary.
The trustees may give the information to a parent or guardian of minor beneficiaries (anyone under the age of 18) or those who lack capacity.
The Trusts Act 2019 contains a presumption that trustees must give a beneficiary the trust information that person has requested.
Trust information is information about the trust deed, trust administration and trust property that is reasonably necessary for the beneficiary to be able to enforce the trust. Trust information does not include the reasons for trustees’ decisions.
Trustees can require the beneficiary to pay the reasonable cost of providing the information before providing it.
Before proceeding, the trustees must consider the section 53 factors and the nature and context of the request for the information. We recommend that trustees seek legal advice before making their decision.
The Trusts Act 2019 requires trustees to keep core trust documents.
Every trustee must keep a copy of the trust deed and any variations. At least one trustee must keep the other core trust documents.
When a person ceases to be a trustee, they must give the trust documents they hold to a replacement or continuing trustee.
Core documents include:
We recommend that trustees:
Trusts are an effective asset planning tool when used correctly.
Settlors and trustees should review their trusts to ensure they meet current and future needs:
At Raymond Khouri Chartered Accountants we have extensive experience and offer specialist advice on creating and managing your trust.
Ask Us about our Trust Administration, Trust Accounting and Trust Tax services.
We also offer our Trust Risk Review service. It includes: