GRA Blogs

Articles by The Professional Trustee Team

New Trust Law Passed

AUTHOR: The Professional Trustee Team

POSTED: 29 August 2019

30 July 2019 was an important milestone in the land of trusts. That was the date the Trust Act 2019 became law in New Zealand.

One of the objectives of this new law is to provide for greater transparency and accountability by trustees to beneficiaries. This objective is underpinned by trustee duties now being codified.

Whilst it may seem an obvious point to make, it should nevertheless be made... in order for a beneficiary to hold a trustee accountable, they must first know they are indeed a trust beneficiary. Prior to this new enactment, many people would be unaware they were beneficiaries of a trust. This is because trustees did not have a positive legal duty to inform a person of their position. The new Act has reversed this position entirely, however, mandating trustees have positive duties of disclosure to honour.

Pursuant to the newly introduced statute, trustees must now inform people if they are a beneficiary of a trust. This includes fixed and discretionary beneficiaries. Furthermore, trustees must provide specific information to beneficiaries. Whilst trustees have a legal right to withhold information, this will prevail only in very exceptional circumstances.

Clearly, an effect of the new Act means privacy of trust matters will be curtailed to a certain extent. Simultaneously, a greater onus will be placed on trustees to not only meet their legal duties in the administration of trust affairs, but also to be seen by the beneficiaries to do so.

Existing trusts will enjoy a transitional period before they must comply with the Act's provisions. However, on 30 January 2021 all trusts in New Zealand will be subject to the new regime. This gives trustees time in which to take action should they wish to change provisions of their trust deed, such as amending beneficiary classes.

As always, if you need assistance with your trust affairs, be sure to contact us on +64 9 522 7955, info@gra.co.nz or via our website.

Request a Meeting

The Professional Trustee Team

09 522-7955

info@gra.co.nz

© Gilligan Rowe & Associates LP

Did you like this article? Subscribe to our newsletter to receive tips, updates and useful information to help you protect your assets and grow your net worth. We're expert accountants providing expert advice to clients in NZ and around the world.

Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.

Comments

Testimonials

We were about to subdivide our section and needed property tax advice. Googled "who's any good" and GRA were in the top 3 on a few sites that recommended providers. We worked with Anthony Lipscombe. Very easy to deal with, comprehensive chat/ conversation that led to a written report by Anthony where his thinking was sharp, clearly communicated, coming at aspects from multiple points of view. i.e. he took time to make sure the reader (my wife and I) completely understood (in plain English) what he was saying. Highly recommended.

- Jason C, October 2023

Would you like to receive . .

. . tips, updates and useful information to help
protect your assets and grow your net worth?

Investing in residential property?

Put this at the top of your reading list.

If you're investing in residential property, seeking to maximise your ability to succeed and minimise risk, then this is a 'must read'.

Matthew Gilligan provides a fresh look at residential property investment from an experienced investor’s viewpoint. Written in easy to understand language and including many case studies, Matthew explains the ins and outs of successful property investment.