GRA Blogs

Articles by The Professional Trustee Team

The Professional Trustee Team

New Trust Law Passed


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, [email protected] or via our website.



The Professional Trustee Team
© 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.
Testimonials
Thanks again for creating a resolution for my ACC levies situation, which quite frankly blindsided us. Without your expertise & nous, we would have been in a very uncomfortable position. I was very impressed by speed that your were able to resolve our challenge for us. Not surprisingly, my family & I would not hesitate in recommending your or the team at GRA for financial & taxation strategies - C Patterson
We can help
Here's how

Gilligan Rowe and Associates is a chartered accounting firm specialising in property, asset planning, legal structures, taxation and compliance.

We help new, small and medium property investors become long-term successful investors through our education programmes and property portfolio planning advice. With our deep knowledge and experience, we have assisted hundreds of clients build wealth through property investment.

Learn More
TOP