Trusts Bill takes the next step
The Bill will now go back to Parliament and the House for final approval. Assuming a smooth process, Public Trust expects the Act to come into force around April 2019. A transition period of 18 months will then follow to allow trustees to review their existing trusts before the Act finally becomes effective around October 2020.
The Trusts Bill aims to make trust law more accessible to New Zealanders. As well as clarifying existing principles around trust law, the Bill also contains some notable changes. The key principles are:
- Increased duties on trustees: For the first time, trustee duties will be set out in the Act and formalised in law, with clear consequences for breach. The Act will clarify best practice for trustees and increase the expectations on them. This will increase the time and cost involved in complying with trustee duties.
- Increased beneficiary rights to information: Trustees will need to provide beneficiaries with particular information about the trust, including the trust deed, trustee details and financial information about the trust, such as its assets and liabilities. This will have a significant impact on the sharing of trust information and beneficiary expectations.
- Advise all beneficiaries: Trustees must now advise all beneficiaries that they are a beneficiary of the trust. ‘All beneficiaries’ might include wider family members, such as siblings, children’s spouses, the guardians of any minor beneficiaries and any charities depending on the trust’s list of beneficiaries.
On the whole, the Committee’s recommendations regarding amendments were not substantial, and were largely concerned with clarifying and simplifying key terms and clauses and making information more accessible for anyone involved with trusts, such as settlors, trustees and beneficiaries.
Public Trust will keep its customers updated as the new legislation progresses through the Parliamentary process.
If you have any questions about the Trusts Bill or how it might impact you and your trust, Public Trust is happy to provide assistance and can be contacted on 0800 371 471.
Contact: Ian Letham, Content & Communications Consultant
Phone: 022 070 0979