Another step toward new legislation for trusts
Following the Law Commission's report in 2013 recommending that New Zealand's trust legislation be updated, the Ministry of Justice has released an exposure draft of a new Trusts Bill.
The new legislation aims to restate the existing law, while providing clarity and updating the language. It is not intended to change the law, and therefore should not significantly affect existing trusts. Key aspects of the Trusts Bill include:
- the abolition of the rule against perpetuities, and the setting of a maximum duration of a trust at 125 years;
- specifying certain mandatory duties for trustees, which apply to all trusts;
- specifying standard default duties for trustees, which apply unless they are modified or excluded;
- a requirement for any person paid to give advice in relation to the creation or modification of a trust (such as a lawyer or accountant) to give specific advice to the settlor about the meaning and effect of the modification or exclusion of a default duty;
- a requirement for each trustee to keep specified documents relating to the trust;
- rules relating to the provision of information to beneficiaries;
- specifying the powers of trustees, and the ability to delegate some of those powers;
- rules relating to the appointment, retirement, and removal of trustees, and the related requirements regarding the transfer of property; and
- setting out the court's powers in relation to trusts.
The Ministry of Justice is seeking feedback on the Trusts Bill, which it will consider before introducing the Bill to Parliament next year.
A full copy of the Trusts Bill is available on the Ministry's website. Feedback can be made until 21 December 2016.
If you have any questions about the Trusts Bill, or would like assistance with providing feedback, please contact a member of our trusts team.
Disclaimer: the content of this update is not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.