The most significant change in New Zealand trust law in more than 60 years is almost here with the Trusts Act 2019 to come into effect in January 2021.
With this law change comes increased obligations for trustees and clearer right for beneficiaries. We recommend clients with active trusts to undertake a review to determine whether a trust is still right entity for them.
The key changes to be aware of are:
- an obligation to disclose information to beneficiaries: the Act outlines what information trustees are obliged to give to beneficiaries, with certain exceptions;
- mandatory and default duties: the Act imposes mandatory and default duties on trustees;
- knowing the trust deed: the Act imposes duty on trustees to know, understand and comply with the terms of the trust deed;
- record retention requirements: the Act prescribes information that trustees must keep.