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8/06/2021·1 min to read
Trusts Act 2019: Have you reviewed your trust yet?
The Trusts Act 2019 came into force on 30 January 2021 and has rightly prompted a review of many trusts in New Zealand.
The changes that the Act brought about codify the obligations of trustees and the rights of beneficiaries with the aim of making trustees more accountable and trust law more understandable. The changes that are causing the most concern are the duties of trustees and the trustee obligations to keep and disclose information.
What have you done so far?
A trustee should now have:
- All trust core documents
Begun to consider whether to provide basic trust information to all beneficiaries - Procedures for regularly considering exercise of powers including distributions
- Proper recording of trustee’s decisions
- Documentation for all transactions involving trust assets
Has this happened to your trust?
Trends that we are seeing so far include:
- Trustees are resolving who should be given trust information and how much.
- Beneficiaries are being reviewed and classes of beneficiaries are being reduced - this minimises the amount of disclosure required.
- Extensive reviews of trusts are being undertaken - this helps trustees and settlors decide to keep the trust, vary it, wind it up or resettle it.
- Trusts are being distributed and wound up - many settlors have decided the trust has fulfilled its purpose.
- Trusts are being resettled - the trust deed may be old and lack flexibility.
- Trustees are retiring - they do not want the risk of personal liability.
- New trusts are being established - trusts are still a great tool for succession planning and asset protection.
There’s a lot for trustees and settlors to think about so, to help, our trust experts are providing a webinar update on the Act followed by a Q & A session where you can ask all those difficult trust questions!
