A Bill to make trust law easier to access and understand has been introduced to Parliament today by Justice Minister Amy Adams.
The Trusts Bill will update and replace the Trustee Act 1956, making it the first significant change in New Zealand’s trust law in over 60 years.
“Trusts are an essential part of our legal system, with around 300,000 to 500,000 trusts operating in New Zealand today. For an area of law that is so well used, the Trustee Act 1956 is out of date and in need of a refresh,” says Ms Adams.
“The Trusts Bill will provide better guidance for trustees and beneficiaries, and make it easier to resolve disputes.”
Some of the changes include:a description of the key features of a trust to help people understand their rights and obligations mandatory and default trustee duties (based on established legal principles) to help trustees understand their obligations requirements for managing trust information and disclosing it to beneficiaries (where appropriate), so they are aware of their position flexible trustee powers, allowing trustees to manage and invest trust property in the most appropriate way provisions to support cost-effective establishment and administration of trusts (such as clear rules on the variation and termination of trusts) options for removing and appointing trustees without having to go to court to do so.
The proposed reforms are largely based on recommendations for modernising and clarifying trust law made by the Law Commission in 2013. Rather than introducing significant changes, the Law Commission recommended making the current law more accessible to the many people who use trusts.
The Government consulted on an exposure draft of the Bill in late 2016, and a number of improvements have been made as a result of the submissions.
“The consultation process provided an opportunity for affected sectors and individuals to help ensure that the Bill is fit for purpose and to identify unidentified consequences. It also helped us to better understand how the changes will impact affected sectors,” says Ms Adams.
A copy of the Bill can be found here.