Death of a sole trustee

Section 118 of the Trusts Act 2019, which provides that persons who become trustees may complete any formal requirements necessary for the divesting and vesting of trust property on behalf of a former trustee who loses capacity to perform the functions of a trustee, fails or refuses to assist in any transfer. However, where a sole trustee dies section 118 is not available and a vesting order will be required.

As noted in Public Trust (In the Matter of the M Arnott Trust) at [10] and [11] where the sole trustee had died:

[10] The circumstances of this case bear strong resemblance to those in Re Kominik, which concerned an application for vesting the trust property in the new trustees of the trust, following the death of the former sole trustee.4 In that decision, McHerron J confirmed that ss 116 and 117 of the Trusts Act permitted the making of a vesting order in the new trustees where the prior trustee had died. He noted the “execution of the document of appointment” in that case was the death of the former trustee, which brought the will into effect, under which the new trustees were appointed. Similarly, in this case, Ms Arnott’s passing resulted in certain clauses of the Trust Deed coming into effect, which automatically appointed the Public Trust as the sole trustee.

[11] I am therefore satisfied that, in accordance s 116(1), a new trustee of a trust has been appointed, and a trustee of the trust has been removed, through the death of the previous sole trustee, triggering the clause in the Trust Deed that appointed the Public Trust as the replacement trustee. Therefore, under s 116(2), the execution of the document of appointment, removal or discharge, namely the Trust Deed, has divested the trust property from Ms Arnott and vested the property in the Public Trust. Accordingly, under s 117(b) of the Trust Act, the Public Trust has a right, as the new trustees of the Trust, to call for the transfer of the trust property to itself.

References:

• Public Trust (In the Matter of the M Arnott Trust) [2025] NZHC 1249
• Trusts Act 2019, s 116, s117 and s 118
• Re Kominik Family Trust [2024] NZHC 1028