Hamilton Grey Power - July 2020

The new Trusts Act 2019
Just because you have your assets locked
up in a trust account does not mean the
government cannot come after you to pay
for your future care, if that is required.
If you have a trust or are a
trustee, it is really important
that you know about
recent changes to trust law in
New Zealand. The Trusts Act
2019 was passed on 30 July
2019 and replaces the Trustee
Act 1956. The Act clarifies and
modernises existing trust law
and comes with some significant
changes.
What do I need to know?
• The Trusts Act puts into
law the duties of trustees
and requires much greater
transparency around trust
activity.
• Trustees face increased
compliance requirements.
• Beneficiaries need to be told
that they are a beneficiary
of a trust and regularly
provided with information
about the trust without
them needing to request
it. Information can only be
withheld in exceptional circumstances.
What does it mean
for my trust?
Trusts are an important part of
estate planning and provide an
excellent option for managing
assets under the right circumstances.
However, for trusts
existing before the Trusts Act,
it could mean that compliance
duties will increase the cost of
administering, meaning some
are no longer cost-effective.
Greater transparency will reveal
what some trust owners might
prefer to keep private.
What should you
think about?
If you are a trust settler or trustee
you need to start administering
your trust in line with
the new law from 30 January
2021. Seniors, you need to
consider whether you are able
to undertake the increased obligations
you are comfortable
with. The increased information
you need to provide to
beneficiaries and the reasons
for setting up the trust may
still be relevant. You need to
ask yourself, “Will the trust
still offer the same protection
and be cost-effective once the
new compliance requirements
are in place?”
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