New Zealand’s law surrounding trusts has now been updated, 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  The legislation governing trusts had previously remained unchanged for over 60 years and was significantly outdated.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 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
  • Updated dispute resolution procedures
  • Changing the maximum lifetime of a trust to 125 years

For those looking to set up trusts and those with existing trusts, some of these changes are substantial.  

Now is a good time to review your trust and who your trustees are to make sure you are aware of your obligations going forward. 

Claire Tyler