Revamp to 60-year old trust lawJustice
Justice Minister Amy Adams today released draft legislation that will update our trust law and aid in their administration.
“Trusts play an important role in New Zealand. Between 300,000 and 500,000 trusts are operating today. Every day, ordinary New Zealanders use them to manage their finances, with an estimated 15 per cent of private houses held in a trust. They also form part of the economic backbone of the commercial and social sectors,” says Ms Adams.
“Our 60-year old trust law is complex and hard to navigate, partly because it is scattered across the Trustee Act and a variety of decisions made by courts over many years. That’s why in 2009, the Government asked the Law Commission to have a look at how the laws could be modernised and made clearer.
“Given their importance to our society and economy, trust law should be simple to understand so that families and businesses can manage their affairs with confidence.”
The draft Trusts Bill updates and improves the Trustee Act 1956, marking the first significant change in 60 years. The proposed improvements include:
- making it easier for people to understand how to appropriately use trusts to manage their affairs
- clear mandatory and default trustee duties so people know what their obligations are if they’re involved in managing a trust
- requirements for trustees to manage and provide information to beneficiaries
- flexible trustee powers and updated rules
- clear rules for when people make changes to a trust or wind them up
- more options for removing and appointing trustees without having to go to court while also preserving people’s ability to ask the courts to intervene to resolve disputes.
Ms Adams says the proposed reforms are largely based on recommendations for modernising and clarifying trust law made by the Law Commission in 2013. They also reflect advice from a reference group of experts she appointed in 2015, who considered the Law Commission’s recommendations and provided valuable input into refining them.
“We need to ensure it is fit for purpose and that the law suits the needs and realities of everything from family trusts to corporate structures,” says Ms Adams.
“With thousands of trusts in New Zealand, many people will benefit from a more practical and useable law.”
The draft Bill and information on how to make a submission is available online at consultations.justice.govt.nz. Submissions close at 5pm on 21 December.