The new Trusts Act 2019 (the Act) has modernised the existing trust law framework in New Zealand, providing better guidance to trustees in the exercise of their profession through the codification of a series of mandatory duties, most of which will take effect from 30 January 2021.
Specifically, the codification of trustee’s duties falls into two categories:
Before 2021, trustees will need to revise their trust deeds in order to assess whether they include some violation of the rules regarding mandatory duties, and, if that were the case, promptly and adequately modifying the deeds in order to make them compliant.
The Act intervenes also on substance requirements such as the new mandatory retention of all ‘core documents’ for the duration of the Trust (including core documents of previous trustees in cases of retirement of those and appointment of a new one).
Finally, the Act introduces a disclosure obligation in order to ensure that beneficiaries have appropriate basic information such as:
As a result, trustees will need to review the terms of their trusts to assess who the beneficiaries are and whether the terms of the trust can and should be amended to adjust the class of beneficiaries.