Trusts Act 2019 - What does it mean for me? by Stewart Russell
Many of our clients utilise Trusts to protect their assets, even after they are no longer here, for the benefit of future generations. The law that administers Trusts has been complicated and somewhat outdated – governed by the Trustee Act 1956.
The Trusts Act 2019, which comes into force from 1 February 2021, is the first major Trust law reform in New Zealand in 70 years and will be applicable to all existing and future Trusts in New Zealand. The intention of the reform is to make Trust law simpler, more transparent and more accessible to the general public.
If you have a connection to a Trust, as settlor, trustee or beneficiary you need to be aware of your rights and obligations.
What are the Key provisions of the Trusts Act 2019?
- Extending a Trust’s life from 80 years to 125 years
- Compulsory duties for trustees, which cannot be changed in the Trust deed
- Optional duties for trustees, which can be changed in the Trust deed
- Retention of information and Trust documents
Disclosure of information to be made available to beneficiaries, and in what circumstances a trustee may withhold this information
- Exemption and indemnity clauses - a Trust deed must not limit a trustee’s ability or provide an indemnity for dishonesty, wilful misconduct or gross negligence
- Appointment and removal of trustees - these have been modernised and broadened to minimise the need to apply to the court
- Definition of a minor - reduced from 20 to 18 years old
- Disputes resolution - an alternative disputes resolution is set out in the Act
What does this mean for me?
- As a trustee, there will be greater compliance requirements and you will be required to contact beneficiaries and supply them with basic Trust information.
- As a beneficiary, the trustee must notify you that you are a beneficiary and provide you with basic Trust information.
The Trusts Act 2019 sets out greater expectations for trustees beyond a name written on documentation and it will no longer be acceptable for trustees to take a passive role within the Trusts they serve.
With these changes coming into effect now is a perfect opportunity to revisit your Trust and assess:
- What does the new Act mean for me?
- What do I need to be thinking about and doing and by when?
- Who should I talk to?
To assist you with answering these questions we are holding a free webinar in conjunction with Lindsay Pope, a specialist on good trustee and legacy planning practices with over 40 years’ experience in professional trustee and private client services.
The webinar is on Tuesday 10th November at 11.30 and should last one hour.
Register now - https://attendee.gotowebinar.com/register/9178377132804847120
After registering, you will receive a confirmation email with instructions on how to join the webinar.