Trusts are changing

On 30 January 2021, the new Trust Act 2019 will come into effect. The Act changes and improves the laws governing trusts in New Zealand for the first time in more than 60 years.

If you have a trust, or are thinking about setting up a trust, these changes will affect you. Here’s a snapshot of how:

• As a trustee you will be required to provide more information to beneficiaries of the trust. Beneficiaries will also have the right to request more information than previously. These requests can relate to details like assets, distributions and loans made by the trust.
  
  
• Increased accountability around the way duties of the trust are carried out
  
  
• At least one trustee will be required to hold all core documents and records relating to the trust and keep them up to date. All trustees will be required to hold a copy of the trust deed and any variations to it.
  
  
• The life of a trust can now be extended from 80 years to 125 years

At Sudburys we work with a number of clients who hold trusts. Our recommendation for all of them is to take this opportunity to review whether your trust is serving its purpose. 

For some, your trust set up could be historical, circumstances have changed and the time and cost associated with managing the trust moving forward is simply not worth it, making it more appropriate to wind your trust up. For others, trusts still provide valuable asset protection and can be an important estate planning tool. Keep in mind that where property is involved, there are a number of things to consider.

If you haven’t already had communication from your lawyer, we encourage you to book an appointment with us to consider the implications of these law changes. Your appointment will cover:

• A review of the relevancy of your existing trust or trusts
  
  
• The implications of the new laws in a practical sense
  
  
• Instructing your lawyers of your wishes

Every trust and trustee will be affected by these changes. Make sure you know how. Contact us to find out more or to book your appointment with our team.