Whānau trusts: what happens if a sibling changes their mind?

You and your siblings decide that you want to form a whānau trust to bring together your various Māori land interests to prevent fragmentation of your shares. But what happens if one of your siblings later changes their mind? Can they partially terminate the trust and take back what they donated to the whānau trust?

In a recent decision, the Māori Land Court rejected an application by a sibling trustee and beneficiary seeking to partially terminate their whānau trust.

The Māori Land Court held that the beneficial ownership of the interests in the land did not remain with the applicant simply because he contributed them to the trust.  The Māori Land Court found no case law supporting this suggestion and stated that it went against the scheme of whānau trusts, which are supposed to transform individual interests in land into interests of beneficiaries based on whakapapa to tupuna.  In doing so, the whānau trust is more in line with traditional concepts.

The Māori Land Court noted that a change of mind does not justify removing interests from the whānau trust in light of significant opposition from other trustees and beneficiaries. The Court stated that to allow the applicant to do so would go against the original kaupapa which he and his siblings fully embraced when they originally established the trust.