After over a decade of review, New Zealand’s law of trusts has been significantly updated with the passing of the Trusts Act 2019 (the Act). If you are a trustee or beneficiary of a family trust or charitable trust, you need to know how the Act will affect you. The purpose of this article is to provide a brief and general overview of the Act for you to consider.
Many family assets in New Zealand are owned by a family trust. The trustees of such trusts must comply with a wide range of duties and obligations. This article considers one of those duties, the trustee duty of impartiality, and what this duty means in practice, particularly when trustees want to distribute trust assets unequally amongst trust beneficiaries.
We are often approached by clients who would like to give something back to the community and have therefore decided to form a charitable trust. There are a number of key steps in this process, which we can assist with.
It is an honour to be asked to be an independent trustee for a friend or family member. However this honour comes with significant risks. This article discusses those risks and how to minimise them.
If you have a family trust, you will (hopefully) have considered what will happen with your trust after you have died. You may have signed a memorandum of guidance setting out your long term wishes for the trust and you may have nominated who you would like to hold the power of appointment of trustees after your death. But have you considered what would happen if you, or one of your co-trustees became mentally incapable?
As family trusts have grown in popularity over recent years, increasing numbers of people have been asked by friends and family members to take on trustee roles. The offer is often seen as something of a compliment; a sign of respect for the skills and wisdom of the trustee. However, potential trustees can easily overlook the risks involved with accepting such an offer.
Family trusts are often marketed as a great way to protect family assets. Although trusts can be useful, they are not ‘get-out-of-jail-free’ cards, as Mr Lightbody discovered when his trust was considered by the Supreme Court in Regal Castings Ltd v Lightbody.