Peter and Helen bought their family home about 10 years ago. Peter is in business, and at risk of being sued by disgruntled creditors. They were looking for a way to protect their home and began considering a Trust.

Trusts are a common entity in New Zealand and are advisable for a variety of reasons.  You should consider setting up a Trust to protect your assets if any of the following apply to you:


You are a Company Director, are a sole trader, or can be held liable for your professional advice. In such roles, your assets may be vulnerable to potential creditors, or others making a claim of negligence against you.

The family home is an example of a significant asset that can fall prey to creditors, and you may look to protect not only yourself but your family by placing substantial assets such as this in a Trust.


You believe you will enter into a new relationship in the future but wish to safeguard your assets in the event of a separation or dissolution. Trust property is not generally relationship property, and is therefore not generally subject to the relationship property rules of equal division. However, Trusts can still be broken and the assets clawed back in certain circumstances. Therefore the best method of protection available to you is simply to be proactive by placing your assets in a Trust before a relationship has even begun.

You wish to prevent family assets being claimed by children’s partners in the event of a relationship breakdown. Assets held in your Trust cannot be accessed by your children’s spouses (provided they are not beneficiaries of the Trust).


You wish to provide for your children. You are concerned your children may squander any assets given to them outright on your death or during your lifetime.

The trustees will be able to take your wishes into account when making distributions and provide sensible solutions. In this instance, drip-feeding amounts to your children rather than making a lump sum distribution may be desirable.

Rest Home costs

You want to keep some of your assets separate from your other personal assets for the purpose of potentially obtaining a government contribution towards your rest home care in your old age. Gradual gifting over a set period of time may protect the Trust property from being used for costs associated with rest home care.

The modest financial investment in establishing and maintaining a Trust is very good value given the potential serious damage it usually protects you from.

If you believe you would benefit from establishing a Trust, or would like further information relating to this topic, please contact us.

Please note that Rainey Collins is not contracted to provide Legal Aid, other than in the Treaty of Waitangi area.  We therefore are unable to take on any Civil or Family Legal Aid work. If you require Legal Aid in those areas, you can search the list of Legal Aid lawyers on the Ministry of Justice website.