{"id":223261,"date":"2023-05-19T19:35:37","date_gmt":"2023-05-19T06:35:37","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=223261"},"modified":"2023-07-18T15:36:18","modified_gmt":"2023-07-18T02:36:18","slug":"faqs-trust-law","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/business-structures\/faqs-trust-law\/","title":{"rendered":"FAQs About Trust Law in New Zealand"},"content":{"rendered":"\n

The Trusts Act 2019<\/em> (the Act<\/strong>) updates and improves the law governing trusts since the Trustee Act 1956<\/em>. Many of the key changes aim to make trust law more accessible and to enable beneficiaries to hold trustees more accountable. The Act applies to existing trusts in New Zealand, as well as any trust created on or after 30 January 2021. The changes have resulted in a number of practical implications for both trustees and beneficiaries<\/a> to note. To help unpack the Act, this article answers frequently asked questions about trust law in New Zealand. <\/p>\n\n\n\n

What are Mandatory and Default Duties?<\/h2>\n\n\n\n

The Act has divided the core trustee duties (which were already part of the law) into mandatory duties and default duties. <\/p>\n\n\n\n

Mandatory duties must be performed by the trustee and cannot be modified or excluded by the trust deed. The five mandatory duties are to:<\/p>\n\n\n\n

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  1. know the terms of the trust;<\/li>\n\n\n\n
  2. act in accordance with the terms of the trust;<\/li>\n\n\n\n
  3. act honestly and in good faith;<\/li>\n\n\n\n
  4. deal with trust property and act for the benefit of beneficiaries following the terms of the trust deed; and<\/li>\n\n\n\n
  5. exercise trustees\u2019 powers for a proper purpose.<\/li>\n<\/ol>\n\n\n\n

    Default duties can be excluded or modified in the trust deed. The ten default duties are as follows:<\/p>\n\n\n\n

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    1. general duty of care;<\/li>\n\n\n\n
    2. to invest prudently;<\/li>\n\n\n\n
    3. not to exercise a power for a trustee\u2019s own benefit;<\/li>\n\n\n\n
    4. to consider the exercise of a power;<\/li>\n\n\n\n
    5. not to bind or commit trustees to future exercise of discretion;<\/li>\n\n\n\n
    6. to avoid a conflict of interest;<\/li>\n\n\n\n
    7. duty of impartiality;<\/li>\n\n\n\n
    8. not to profit;<\/li>\n\n\n\n
    9. to act for no reward; and<\/li>\n\n\n\n
    10. to act unanimously.<\/li>\n<\/ol>\n\n\n\n

      Do I Have to Retain Core Trust Information?<\/h2>\n\n\n\n

      The Act requires trustees to keep core trust documents<\/a> and records, including:<\/p>\n\n\n\n