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General

What about the little people?

The Trusts Act 2019 came into full force and effect on 30 January 2021. A year later we have the benefit of court decisions regarding how the Trusts Act will be interpreted and followed in practice. Early decisions under the Trusts Act reflected, perhaps not surprisingly, applications for variation.

Section 121 of the Trusts Act effectively codifies the rule in Sanders v Vautier, with some enlargement in section 125 to provide  for the application of the rule when all of the final beneficiaries are not in agreement. By way of background as set out in Gavin v Gavin:

The principles upon which a court will consider whether to agree to whether to consent to an arrangement on behalf of minors, unborn and unascertained beneficiaries who are not able to consent themselves were well understood prior to the Trusts Act coming into full force and effect.  These are set out in Gavin v Gavin as modified by section 24 of the Trusts at as follows at [15]:

The court’s role in a proposed variation of trust was further considered in Talijancich v Talijancich where the question for the court was whether the court can waive consent on behalf of both adults and minors, incapacitated, contingent and unborn beneficiaries.   In that case the court stated at [18] that:

“… s 122(2) is clear in its effect. A trust can only be varied if every beneficiary consents to the variation, a trustee has received a request to vary the terms of the trust, and if any of the beneficiaries is a beneficiary described in section 124(2), the court has made an order under section 124 approving the variation of terms or resettlement on behalf of that beneficiary, and the trustee has agreed to the proposal.”


References:

  • Gavin v Gavin [2021] NZHC 550
  • Talyjancich v Talyjancich [2021] NZHC 753

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