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Trustee Duties

AUTHOR: The Professional Trustee Team

POSTED: 02 July 2021

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.

Request a Meeting

The Professional Trustee Team

09 522-7955

[email protected]

© Gilligan Rowe & Associates LP

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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.

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I would like to express my sincere thanks to yourself and the team at GRA / Cornwall Trustees for the services you recently provided to my Trust. You were both professional and expedient in organising for Skeates Law and yourselves to execute the conveyancing of my property into the Trust to allow the title to reflect the correct Trustee names at LINZ and on the local council rating system in time for my advertising the sale of this property. I am sure that you have a team supporting you that allows you to make quick decisions and for these decisions to be executed with accuracy and pace that provided such an excellent service to my Trust. This also reminds me of an old L.V Martin television advert where their motto was "it’s the putting right that counts" and you certainly did do this in my case. In return you have a very satisfied client who wishes to convey their appreciation of their experience. Kind regards - Pravin

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