ADLSI Welcomes Proposed Changes to New Zealand Trust Law

Trustees and beneficiaries will benefit from clearer rights and responsibilities for those involved with trusts

Auckland, 11 September 2013 – Auckland District Law Society Incorporated today welcomed the Law Commission’s recommendation for a new Trusts Act.

The proposed new act will be the first comprehensive review of trust law in New Zealand, and brings together all the accepted rules of trust law, says ADLSI member, Catherine Atchison.

“These changes will have a far-reaching effect. With an estimated up to 500,000 trusts, New Zealand has one of the highest numbers of trusts per capita in the Commonwealth.  With trusts being a common way for many New Zealanders to manage property and other assets, ADLSI conservatively estimates that this new law will impact around one million people.

“Clarifying the roles and liability of trustees and expanding the rights of beneficiaries is the main purpose of the new Act. Auckland District Law Society believes that the proposed changes are of great benefit to all parties involved in a typical trust and will have a fundamental impact on the management and establishment of trusts for decades to come.”

At some stage the Trustee Act 1956 will be repealed and in its place will be a much more comprehensive Trusts Act that will set out the core requirements of a trust and requirements for creating a trust.

The main changes are as follows:
·         The characteristics of a trust are outlined
·         Trustee conduct is defined, and mandatory trustee duties introduced
·         A (default) list of trustee duties is created
·         Trustee liability for breach of trust or dishonesty cannot be limited
·         Mandatory requirements for the provision of information to beneficiaries
·         Rationalisation of trustee powers, with a schedule of powers provided
·         Trustee standard of care linked to the skill and knowledge of the trustee
·         New rules around trustee appointment and removal, and change of trustee powers
·         Family Court to have jurisdiction (where parties consent) to resolve issues in respect of relationship property
·         Perpetuity period for trusts extends to150 years
·         Recommendations made to amend the Property Relationship Act and Family Proceedings Act to provide relief to a disadvantaged spouse or partner when property has been transferred to a trust.

Auckland District Law Society was one of several parties involved in the review process, providing submissions to the Law Commission on the changes proposed to New Zealand’s trust law.

ENDS

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