Articles by The Professional Trustee Team
So you have set up a trust and you are a trustee, and you wonder, “what are my obligations as a trustee?”
To answer that question we turn to the Trusts Act. Under this Act there are two classes of trustee duties, being mandatory and default. The mandatory duties are what they sound like. They are irrefutable obligations that trustees must abide by. On the other hand, default duties can be rebutted by terms of the trust deed.
Mandatory Trustee Duties
So with this in mind what are the mandatory duties of a trustee? Fortunately, they are likely what you would expect to be the case and how you would likely behave as a trustee in any event.
a) You must know the terms of the trust.
b) You must act in accordance with the terms of the trust.
c) You must act honestly and in good faith.
d) You must hold or deal with trust property and otherwise act (i) for the benefit of beneficiaries, in accordance with the terms of the trust; and (ii) where the trust has a permitted purpose, to further that permitted purpose in accordance with the terms of the trust.
e) Exercise your powers for a proper purpose.
In addition, trustees have an obligation to retain documents relating to the trust. Every trustee must have a copy of the trust deed and any variations to it. On top of that, at least one trustee must have the following documents:
a) Records of the trust property that identify assets, liabilities, income and expenses
b) Records of trustee decisions
c) Any written contracts entered into by the trustees
d) Deeds of appointment and removal of trustees
e) Any memorandum of wishes from the settlor
f) Any other documents necessary for the administration of the trust
If you are a trustee of a trust and you are concerned about complying with these mandatory duties or keeping trust records, then please contact us at GRA. We offer a professional trustee service and can assist. Phone +64 9 522 7955, [email protected] or via our website.
I got a lot out of each Property School session and feel I have a lot more knowledge. - Amelia, September 2018
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