You have previously set up a whānau trust to hold all of your Māori land interests. Now the trust is unable to function effectively due to bickering and disagreement amongst the trustees. What can you do?

One option is to make an application to the Māori Land Court to terminate the trust.

In a recent decision, the Court dealt with such an application by the person who had created the trust (“the settlor”). The Court listed three important factors that must be considered when deciding an application to terminate a whānau trust:

  1.    A trust may not be terminated if the settlor has simply changed their mind, unless there is an absence of         opposition from the whānau;
  2.    The trust should not be terminated if this will create detriment or unreasonable disadvantage to affected          whānau members; and
  3.    Evidence of a trust failing to adhere to their terms of trust and core accountabilities may be sufficient                grounds for termination.

Although some whānau members opposed the application to terminate the trust, the Court accepted that the settlor had made it as a last resort. The trust was dysfunctional, and her whānau had been divided for a number of years. Three of the trustees had even asked the Court to be relieved of their trustee duties.

In granting the application, the Court accepted the settlor intended to provide for her children and secure their interests in the land. Termination of the trust would restore the settlor’s control of her lands lost by the trust’s dysfunction.

This case confirms that a whānau trust is not easily terminated once established. It is crucial that Māori landowners wishing to set up a whānau trust fully consider the implications before doing so, and take great care in choosing trustees.