The new Act comes into force on 30 January 2021, and there are three main changes that will increase trustee responsibilities:
A key focus of the new Act is to ensure beneficiaries have information to enforce trusts in which they have an interest in. Generally speaking, beneficiaries of a Trust need to know that they are a beneficiary, who the Trustees are, and that they are able to request information about the Trust from the Trustees, which can include a request for financial information.
You may be concerned that Trustees must advise beneficiaries that they are in fact a beneficiary of the Trust and that this may open the floodgates for requests on the financial position of the Trust. If so, you may need to reassess your list of discretionary beneficiaries as set out in your Trust Deed.
The new mandatory and default duties for trustees set out in the Act may contradict the terms of your existing Trust deeds thereby requiring a variation to your Trust deed.
The new Act will mean that people need to:
Thanks to Breanna Fuller from Sutcliffe Matson Law for the above summary – https://www.sutcliffematsonlaw.net.nz/blog/trust-law-update/
From a practical point of view, we suggest that:
If you have any further questions about the implications of the changes, please feel free to contact us.