Trustees and Beneficiaries of Māori Land Trusts… be aware that Changes to Trust Law are coming…

The Trustees of a Māori land trust were contacted by a beneficiary of the trust with a request for information about the financial position of the trust.  This beneficiary did not regularly attend trust hui, and they were worried that the information may be passed to other parties who would not treat it confidentially.  They sought legal advice.

They were informed that currently, there was no obligation on them to provide specific information to the beneficiary (as this wasn’t in their trust deed) at all.  However, their lawyer advised them that from next year, they will be specifically required to provide information on request of beneficiaries, taking into account various factors, including commercial confidentiality.  They did not release information to the beneficiary on the basis that they did not have to as yet, but it made them aware that they needed to be well aware of the requirements in the new legislation prior to it coming into force, in case they were suddenly contacted by a large number of beneficiaries at that time.

It is important that all those involved in trusts, including Māori land trusts (whether it be ahu whenua trusts or whanau trusts) are aware of the upcoming changes to trust law, in the form of the Trusts Act 2019.  The legislation governing Trusts had previously remained unchanged for over 60 years and was significantly outdated.

The Act applies to all types of Trusts, including Māori land trusts and Charitable Trusts (although some provisions are limited in the case of Charitable Trusts) and will come into effect on 30 January 2021.

The main changes this new Act brings are:

• Clarification of the role and duties of trustees, so those who are appointed as trustees know their obligations;
• Clear requirements about providing information to beneficiaries about the trust so that beneficiaries can enforce their rights.  This includes some basic information that all beneficiaries must be provided, with a right to request additional documentation about the trust;
• Practical and flexible trustee powers that allow trustees to manage and invest trust property;
• More streamlined and cost-effective mechanisms for removing and appointing trustees, especially where trustees have lost capacity; and
• Updated dispute resolution procedures.

Read more information on the changes to the trust law.