The Trust Act 2019 finally comes into force on 30 January 2021 and is the first major reform to trust law in the lifetime of most New Zealand lawyers. The changes will apply to all existing and new trusts.
Below are some key changes you need to be aware of.
The Act now contains ‘mandatory’ and ‘default’ duties for trustees. Mandatory duties cannot be modified or excluded by the trust deed so all trustees will be required to abide by these duties. Default duties are obligations by which trustees must abide – unless the settlor decides otherwise when the trust is established.
Trustees must provide basic trust information to all beneficiaries of the trust. This basic information is:
- The fact that a person is a beneficiary of the trust
- The name and contact details of the trustees
- Details of trustee changes as they occur
- The beneficiary’s right to receive a copy of the trust deed
- The beneficiary’s right to receive further trust information.
At least one trustee needs to hold all the core documents and records of the trust and keep them up to date. These documents must be held for the duration of the trust. Other trustees must each hold copies of the trust deeds together with any variations. Core documents are:
- The trust deed together with any variations to the deed
- Copies of financial statements/records of trust property
- Records of trust decisions
- Written contracts
- Appointments and removal of trustee documentation
- Statement of wishes for the trust.
The maximum duration of a trust has been extended from 80 years to 125 years.
The age of majority (the default age that a person can inherit if not specified) changes from 20 to 18.
More flexible powers for trustees to manage trusts.
Get in contact with us or read more: