In a recent Māori Land Court decision the Court explored the question of whether a whānau trust should be terminated.

The trustees were having difficulty meeting their obligations: some lived overseas, others were caring for sick family members, and family relationships were getting worse, in part because of tensions related to the trust.

As a result, three of the five beneficiaries wished to terminate the whānau trust and withdraw their interests. However, the other two beneficiaries wanted to keep the trust over their own interests, even if the others withdrew.

The Court noted that in deciding whether to terminate a whānau trust it must consider the views of the owners, as well as the advantages and disadvantages of termination.

The Court then considered whether partially terminating the trust instead of completely terminating the trust would be a better option. That way the two beneficiaries who wanted to keep the trust over their interests could do so.

In deciding whether to partially terminate the trust the Court pointed out that it must consider the following factors:

  • whether partial termination would enable the land to continue to be owned by Māori and  effectively used;
  • the purposes of the whānau trust;
  • whether the beneficiaries and trustees agreed to the partial termination;
  • the impact of the partial termination on the remaining beneficiaries, and the trust; and,
  • issues between the trustees that required the Court to intervene.

After considering the above factors the Court held that the whānau trust could be partially terminated, rather than completely terminated.

If you are considering terminating a whānau trust, then you may wish to consider whether partial termination of the trust would be a better option for you.  Your specialist Maori Land legal advisor will be able to advise you regarding your options in your specific situation.