Decision time. In or out?
New trust law for New Zealand
The New Zealand trustscape changed in late July 2019 when the Trusts Act 2019 was passed. The Act takes effect from 30 January 2021 which leaves a short 18-month window before the changes apply.
New rules for managing information
The legislation is designed to make trust law more accessible and easier to understand. This is to ensure beneficiaries can enforce the trusts in which they have an interest. Trustees will have obligations to:
hold core documents
provide certain information to beneficiaries
respond to beneficiary requests for information.
The legislation makes trustee duties and responsibilities very transparent. If beneficiaries are better informed, trustees will be more accountable.
Trustees will need to be on top of their game - particularly professional trustees who are held to a higher standard of care.
New skills sets
Managing expectations will be an important part of the trustee's role going forward. For example, managing expectations between:
Co-trustees,
Trustees and beneficiaries
Trustees and trust creators (settlors)
Trustees and their advisers
This provides an opportunity for professional trustees to take the lead in the trusts in which they serve.
What should professional trust service providers be thinking about?
The first decision for firms offering professional trust services is whether they will be in or out?
Either a yes or a no will be a good decision - the challenge will always be implementation because 18-months isn't much time.
The key will be having good information on which to make an informed decision and a process to implement it.
For any firm intending to offer trust services, the new Act provides long needed leverage to get the trusts running properly and terms of engagement in place. In other words, there's never been a better time to get things sorted.
Most professional trust providers are reviewing their situation and weighing up the options. For firms wanting to fast-track the process, I’ve prepared a white paper specifically to help shape their thinking.
You can download a copy on the ‘Resources’ page here on this site.
Plan with purpose!
Lindsay