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It is generally accepted that New Zealand has more formally settled discretionary trusts per head of capita than anywhere else in the world. These trusts control assets worth billions of dollars. However, the majority of people who can benefit from these trusts either do not know about the trust, or about their rights in respect of the trusts.
The purpose of this commentary is to provide a simply written and easy to understand explanation of what it is to be a beneficiary of a discretionary trust and what rights a beneficiary has in respect of a discretionary trust.
To understand what it is to be a beneficiary, it is necessary to have an understanding of what a trust is.
There is no legal or singularly accepted definition of what a trust is.
However, it is widely accepted that in its simplest form a trust is property that is owned by a trustee for the benefit of a beneficiary or beneficiaries.
The trustee is the legal owner of the property subject to the trust. However, the trustee cannot benefit from the property (unless the trustee is also a beneficiary).
Most importantly, as well as owning the property, the trustee also owes certain obligations to the beneficiaries. The existence of these obligations are fundamental to a valid trust. It is from these obligations that the beneficiaries derive their rights.
While the trust’s assets are held for the sole benefit of the beneficiaries; which beneficiaries can benefit, and to what extent is determined at the trustee’s sole discretion.
Although the trustee is the owner of the trust property at law, the trustee can only act for the benefit of the beneficiaries.
Even though the trustee cannot benefit from the trust the trustee is accountable to the beneficiaries for any loss.
If you find this a bit heavy ready, don’t worry. You are not alone. Even the experts can’t agree as to exactly what a trust is!
The message you need to take from this chapter is that trusts, unlike companies, are not legal entities. It is for this reason any dealings with a trust are with the trustees not the beneficiaries.
It is also important to appreciate that the information provided here is in the context of a discretionary beneficiary who has no fixed rights, other than a right to be considered. Where a trust is a will trust, or a “fixed trust” that provides for beneficiaries to have pre-determined interests in property, for example income for life on $500,000 or my house at 2 Glebe Street; the beneficiary’s rights are related to that property interest and as such are stronger and easier to establish and enforce.
The same is the case where a beneficiary is the final beneficiary of a discretionary trust where a named beneficiary might be entitled to share equally in the trust’s remaining property at the end of the trust.
The subject matter being considered here is that of a discretionary beneficiary with nothing more than a right to be considered, which is also referred to as an expectancy.
Major trust concepts
A reference to a trust is a generic reference to both property owned by the trust and the complex relationships that comprise a trust.
There is no register of discretionary family trusts. A trust is only required to register with Inland Revenue if the trustee earns income. That means that a trust that only owns a family home does not need to register with Inland Revenue.
The settlor is the person who settles the trust. This person chooses the initial trustee or trustees, decided who will benefit from the trust and what the trust rules will be. These rules are recorded in a document called the deed of trust.
The Settlor can also elect a person, who can be the settlor or someone else, who can add and remove trustees and or beneficiaries.
The trustee is the legal owner of the trust property and the legal “face” of the property. Registers of property ownership such as the companies office, which records share ownership, and Land Information New Zealand, which records property ownership, are not permitted to show that the owner of property is a trustee. This means that trust ownership is private information.
A beneficiary is a person who can benefit from a trust either through receiving capital or income. If this person is a discretionary beneficiary the beneficiary can only benefit at the trustee’s discretion.
A final beneficiary is a person who benefits when a trust comes to an end. Trusts can only run for 80 years. For a trust to be valid it is essential that the final beneficiaries can be identified.
Who is responsible for letting you know you are a beneficiary?
Despite the fact that trustee holds the trust’s assets for the beneficiaries, the trustee of a discretionary trust has no obligation to tell you if you are a beneficiary of the trust.
This may seem somewhat absurd given that the trustee is accountable to you for how the trust is managed.
It is a matter that has been grappled with by the Courts and academics for some time and although the possibility of legislated rules requiring a trustee to notify you that you are a beneficiary is being considered, at present there is no obligation for anyone to do so.
Where a trust is a fixed trust so that each beneficiary has defined interests the matter is a little different and the Courts have held that such a beneficiary must be advised of the trust and the beneficiary’s interests once the beneficiary is an adult.
There are no public registries of trusts or trust beneficiaries in New Zealand.
If you suspect that you are the beneficiary of a trust, you can ask the trustee to confirm this. The trustee would be obliged to answer correctly. That is, although the trustee need not tell you that you are a beneficiary, the trustee must acknowledge that you are if questioned.
A trustee who did not confirm that a person was a beneficiary when asked would be in breach of trust and could be liable to the beneficiary for any loss the beneficiary incurred because of the breach.
Of course, if you do not know to ask if you are a beneficiary, or who to ask even if you know you might be, you are none the wiser.
If you would like guidance on how to establish whether this might be the case and if so who the trustee is your family lawyer may be able to assist you to make appropriate enquiries.
Having confirmed the existence of a trust, a beneficiary is entitled to ask to benefit from the trust’s assets.
Whether or not the trustee elects to given anything to a beneficiary is at the trustee’s discretion. However, if a trustee simply declines a request out of hand, without giving it due thought, the beneficiary can actually apply to the Court to remove the trustee and appoint another trustee.
Regardless of whether requested to do so by a beneficiary, a trustee has an obligation to consider the interests of all of the beneificiaries. This does not equate to an obligation to given money to or otherwise benefit each beneficiary.
To summarise, a beneficiary has the right:
The right to seek assistance from the Court does not mean that assistance will be given as every case will be considered on its own merits. As a general proposition the narrower the class of beneficiaries (as is the case with most modern family trusts) the more likely the Court will be to assist
A beneficiary also has a right to trust information. This is important as establishing that you are a beneficiary is of limited use if you don’t know what the trust’s assets and liabilities might be. Where trustees will not provide information or agreement cannot be reached regarding what information must be provided or how either party can seek the assistance of the court. See Erceg v Erceg
A beneficiary is entitled to ask a trustee for information about a trust including:
If the trust the beneficiary is enquiring about has already come to an end or been resettled onto another trust the beneficiary is entitled to ask for any documents that relate to the winding up or resettlement of the trust.
A trust is wound up when it comes to an end. A resettlement occurs when the assets of a trust are transferred to another trust.
If the trustee won’t provide the information requested a beneficiary can apply to Court for directions that the trustee must provide the information requested.
The reason beneficiaries are entitled to receive information is to enable them to ensure that the trustees is acting in accordance with the terms of the trust deed. However, these rights will always be subject to the discretion of the court that must balance the rights of a beneficiary seeking information against the interests of all the beneficiaries, and in some circumstances, the wider family.
Beneficiaries are not generally entitled to see information relating to the trustee’s decision making processes as this information is the trustee’s information, not the trust’s information.
Information trustees do not have to give to beneficiaries includes:
However, where advice from a settlor takes the form or a memoranda or letter of wishes, the Court can, on application to it, assess whether that advice does in fact form part of the trust documents. This is determined on a case by case basis.
A beneficiary who has to file Court proceedings is not automatically entitled to have his or her costs paid.
As a general rule a beneficiary who makes a successful application is entitled to have his or her costs met, to a certain extent, from the trust. However, as having costs met from the trust means that the beneficiary’s costs are being met from property held by the beneficiary, this is not necessarily entirely satisfactory.
In some circumstances the Court will order that the trustee meets the beneficiary’s costs, in whole or in part, personally. Where this is the case the trustee cannot seek to be reimbursed from the trust. Costs will be awarded against a trustee personally where the trustee has not met the trustee’s obligations to account for the trustee’s actions or to provide trust information. The greater the failure on the part of the trustee, the greater the likelihood of a costs award against the trustee.
A beneficiary can apply to the Court to review a trustee’s decisions or anything a trustee has done or not done. This is a statutory right, which means that it is provided for by legislation: see the Trustee Act 1956, s 68.
If an application is made the Court has wide powers to review a trustee’s actions and require the trustee to justify decisions made or not made.
Whether a discretionary beneficiary can apply under s 68 is not entirely clear. However , Court decisions to date suggest this avenue is possible where the class of discretionary beneficiaries is relatively small.
Although not supported by case law yet, if the discretionary beneficiary is also a final beneficiary, a claim may be permissible under s 68.
The administration and management of discretionary trusts in New Zealand is still relatively “new” in a legal context and for that reason, the answers to some questions are yet to be confirmed by the Court.
In the absence of certainty regarding whether a discretionary beneficiary can seek help under the Trustee Act it is important to appreciate that the High Court also has an “inherent jurisdiction” to assist beneficiaries where the trustee has failed to do so.
If a trustee has disposed of trust property in breach of trust, a beneficiary can re-claim that property from the trustee. Where the property has been disposed of the beneficiary can trace the trust property and claim the beneficiary’s proportionate share against property purchased with the trust property.
Trust arrangements
Director of Proceedings v Southern District Health Board [2020] NZHC 503 provides a good example of an express trust with powers of advancement when the size of the fund does not warrant a formal trust arrangement. In this case an agreement to provide for a minor whereby funds would be paid for his benefit to be held by his mother.
Trust law is a complex area. If you have a question about a trust you can ask your trust adviser to assist.
If you do not have a relationship with a lawyer or adviser with trust experience you can seek assistance from Vicki Ammundsen, who is a director at Vicki Ammundsen Trust Law. Vicki can be reached at vicki@vatl.nz
If you want to look at more trust resources the following publications may also assist:
Vicki Ammundsen, Taxation of Trusts, ed 2, CCH New Zealand Limited (2011)
Vicki Ammundsen, The Trustee’s handbook, ed 3, CCH New Zealand Limited (2011)
Top 100 Questions on Trusts, ed 2, CCH New Zealand Limited (2008)
Trustee’s Duty of Disclosure (2012) 24 SAcLJ
Other references
Matters of Trust 
Can the trustee deny the beneficiary rights to use assets in the trust?
Posted by Carol | September 16, 2012, 4:52 pmIf the trust is a discretionary trust, the beneficiaries only have the right to be considered, that is the beneficiairies are only benefitted to the extent the trustees choose to. However, if the trust is a fixed trust, or the trust’s assets has vested in the beneficiaires, then the beneficiaries will have enforceable rights in trust property.
Posted by vickiammundsen | October 10, 2012, 12:36 pmIs a beneficiary of a trust entitled to live in a trust property free from rent and receive a dividend .
Posted by Kayla Jenkins | October 9, 2020, 8:47 pmBeneficiaries of discretionary trusts benefit to the extent that the trustees exercise their discretion to provide for any one or more beneficiaries.
Posted by vickiammundsen | October 9, 2020, 9:32 pmIf Trustees are beneficiaries can they exercise their dicretion in their own favour if the deed does not specifiacally provide for this?
Posted by Jon Philip Smith | October 28, 2012, 9:16 amThis question raises a number of issues. While a trustee can, and in New Zealand at least, commonly is a beneficiary, in exercising a discretion in favour of a trustee/beneficiary not only is it necessary to confirm the requisite power to do so; in the event the approach is taken (as is often the case), that the trustee will not vote in his/her favour – this requires reference to whether the trustees’ decisions must be unanimous. The consequences of a trustee not voting, because of concerns regarding impartiality, can make the decision void. See Dever v Knobloch [2009] NZHC 2013, which considers this point.
As a practical matter, where the deed is unclear or there is a conflict between the decision making requirements and the terms of the deed, the deed should be varied to confirm that a trustee can make a decision in favour of the trustee/beneficiary. However, where a deed does provide such a provision there should be also be a requirement that the trustee cannot do so if a sole trustee; and there should also be a requirement that there be an independent trustee.
Posted by vickiammundsen | November 16, 2012, 9:28 amI have a Trustee who bullies and says I have no rights as a beneficiary to the Trust property in the estate. While the property is left abandoned and not maintained who is responsible to check on the property?
Posted by Carol | November 17, 2012, 6:34 amIs a trustee required under trust law to ensure that any distribution of trust income, paid to a beneficiary, is spent appropriately by the beneficiary which properly benefits the beneficiary?
Posted by Bryson | January 22, 2023, 9:47 pmCan a person be the ONLY Beneficary as well as the trustee?
Posted by Min Han | February 7, 2013, 2:47 pmA trustee can be a beneficiary and a beneficiary can be a trustee. However, a trust cannot exist where the settlor, trustee and beneficiary are all one and the same person. If the legal and equitable ownership of the trust property are all held by the same person it is not possible to demonstrate the separation of ownership necessary to find the foundation for the existence of the obligations owed by the trustee to the beneficiary and for the beneficiary to enforce the beneficiary’s rights against the trustee. The existence of these rights and obligations are fundamental to a valid trust – as a trustee acts personally (there is no separate trust capacity) where the trustee and beneficiary are one and the same (and there are no further trustees or beneficiaries) there cannot be a trust.
References:New Zealand Master Trusts Guide, ed 3 at 2.1.3
Posted by vickiammundsen | February 9, 2013, 3:09 pmThank you for your comment outlining your frustrations with how your partner’s estate is being handled. You may wish to consider appointing a lawyer to represent your interests in this matter.
Posted by vickiammundsen | April 6, 2013, 5:06 pmHow soon after year end must trust accounts be completed? and if a trustee willfully fails over a period of time to provide these, could this be considered reach of trust?
Posted by Leon Coy | May 13, 2013, 10:18 amIf the trust does not have a tax agent the accounts should normally be completed within six months of the end of the income year so that the trustee does not lose the opportunity to pay out beneficiary income. Where the trust has a tax agent the period is extended to a year. Where accounts are not prepared the trustee will likely be in breach of the trustee’s fundamental duty to account to the beneficiaries for the administration of the trust. Also, where accounts are not prepared in a timely fashion the question of penalties and the trustee’s liability for income tax must also be considered.
Posted by vickiammundsen | May 21, 2013, 12:05 pmCan a beneficiary fire workers employeed to work for the trust estates, such as a farm if they believe the worker is costing the trust more money that it is making? Also if a trustee gives this worker free grazing but will not allow actual beneficairys free grazing on the land?
Posted by Rebecca | May 18, 2013, 11:05 amWe presume that the employment relationship is between the farm worker and the trustee employer and so, no, in that circumstance the beneficiary does not have the direct right to intervene in the employment relationship. Instead the beneficiary should advise the trustee employer of the beneficiary’s concern with the arrangement and the utilisation of trust property.
Posted by vickiammundsen | May 21, 2013, 11:54 amDoes the beneficiary have a right to have the Trust hire an attorney for the beneficiary if he presumes the Trustee is ridiculously spending?
Posted by carol | May 22, 2013, 4:02 amWhat happen’s if previously the director of the trust past’s away, says there is no outstanding debt. Yet step mother and representative 7 months after death come up with a deed document show borrowings. He borrowed from her and she borrowed from him, years later.
She borrowed more than he did.
Is there any register or way of finding out if funds were paid back to her? Is there a deed registry in NZ that shows when a payments released?
Posted by Vanessa | August 2, 2013, 12:56 amTrusts have trustees not directors – are you perhaps talking about the director of a corproate trust? There is no register of family trusts in New Zealand.
The answer to your question should be in the trust’s accounts.
Posted by vickiammundsen | August 2, 2013, 4:49 pmI have one, a family trust,
Parent died last year, i am not informed of house being sold, money going out to the other sibling,
I have requested a few times to recieve from trust a car for good reason, and get told no everytime, yet the other sibling that benifits from the trust has had a car, home deposit and is part of all the decisions/property an asset moving but is not a trustee.
Is there any way for me to contest the desisions? Or see the asset transfers? Without going through a court?
Posted by Reece | October 15, 2013, 12:56 amAs a beneficiary of the trust you are entitled to see the trust accounts and to request information about the operation of the trust. Information that beneficairies can request includes the deed of trust and any deeds of variation, the trust’s accounts, details of all distributions of capital and income and who the distributions were made to (distribution is another term for payment) and full details of the trust’s assets and liabilities.
As a beneficiary you have a right to seek assistance from the trustees. However, if the trust is a discretionary trust (most family trusts are) the trustees can generally decide which beneficiaries to favour (and which not to).
If the trustees will not provide the information you request you may wish to seek legal advice. However, in the event the trustees continue to refuse to provide the information requested (without a satisfactory reason) you may have no option but to instigate court proceedings. In this regard it is noted that such proceedings are rare and meerly filing proceedings usually results in not only the information that has been requested, but in some instances, costs awards against the trustees.
Posted by vickiammundsen | October 15, 2013, 9:43 amUnder the Probate code if a Trustee favors a particular Beneficiary Isn’t the trustee in Breech of Trust? I have the very same situation and have seemed legal advice and waiting for a hearing.
Posted by jacqueline | October 15, 2013, 3:01 pmTrustees of testamentary trusts have some different duties and obligations compared with trustees of discretionary trusts. The trustee of a testamentary trust, generally has no discretion and must follow the will-maker’s instructions. By contrast the trustee of a discretionary trust generally has the discretion to choose which if any beneficiaries can benefit from the trust.
Posted by vickiammundsen | October 16, 2013, 9:56 pmIf the Trust states that is to be divided into 2 shares but the Trustee does not do so instead distributes more towards the other beneficiary, What will the court do?
Posted by Jacquelyn | October 17, 2013, 4:41 pmA trustee who does not act in accordance with the terms of the trust is acting in breach of trust.
Posted by vickiammundsen | October 17, 2013, 5:47 pmWhat are the rights of a discretionary beneficiary? If the discretionary beneficiaries are overseas, can they go to court for their interests should the only trustee pass away?
Posted by Sam | October 28, 2013, 10:01 amA discretionary beneficiary has rights of consideration and rights in respect of trust informationn. If a beneficiary has concerns as to whether or not the beneficiary’s interests are being adequately considered it may be appropriate to apply to the High Court for the appointment of an appropriate trustee (and if necessary the removal of a current trustee).
Posted by vickiammundsen | October 28, 2013, 10:29 amI was widowed in 2010, my partner was a beneficiary of his fathers family trust. Due to a falling out his father and I have had I am concerned that our children will now be excluded from being considered for benefits from the trust. So I guess my question is, can beneficiaries be removed from a trust? If he is still listed, will his benefits go to the children or his estate?
Posted by Karen | June 10, 2014, 2:40 amWhether or not beneficiaries can be removed depends on the terms of the trust. Beneficiairies have a right to request a copy of the deed of trust, a review of which should answer your question. Regarding the position in respect of their father, if say he was a final beneficiary (that is a beneficiary who receives trust assets when the trust comes to an end), any distribution that would be made to him might be made to his children instead. Again this will depend on the terms of the trust.
Posted by vickiammundsen | June 10, 2014, 12:48 pmHi
I receive $90 per/wk from my family Trust ‘The Genset Trust’ since I left home.
My Trust is now worth over $30 million and my parents are the trustees.
I don’t feel I’m been considered as not even my daily basic needs are met.
I’ve spent a year trying to get my Trust deed though lawyers.
The Upper Hutt lawyers that hold the deed write quote ‘we don’t give out any information, we never do’ this is entirely unhelpful and Im told by my lawyer the only thing is now to take them to court. This will cost from $7000 so seems impossible.
IS THERE ANYWAY TO GET MY TRUST DEED?
IAM A BENEFICIARY.
VERONICA JACOMB
Posted by Veronica | August 3, 2014, 10:40 pmWe refer yuo to clause 5.46 of the Review of the Law of Trusts – a Trusts Act for New Zealand, which provides that “There cannot be any obligation, and hence there cannot be any trust, if the trustee does not owe a duty to account to any beneficiary. To be able to hold a trustee to account, beneficiaries need to know that they are beneficiaries of the trust and need to be able to be provided with trust information on request. … The decision as to whether a particular beneficiary is entitled to be notified that he or she is a beneficiary or is entitled to receive trust information on request has been found by the Privy Council in Schmidt v Rosewood Trust to be something that is within the court’s inherent jurisdiction to supervise the administration of trusts. Based on this decision, which was followed in New Zealand in Foreman v Kingstone,the courts will apply the principle that a beneficiary should be notified of or provided with the information that is necessary to enable the trust to be enforced.”
While there are circumstances where it may not be appropriate for the trustees to provide information the only practical option to advance matters is to file court proceedings, while there are costs associated with this, it is the only way that the matter can be advanced if the trustees are not agreeable to providing you with the information that you require (trust deed, trust accounts etc). In this regard it is noted that trustees who do not provide trust information can be personally liable to meet the costs of failing to do so. If you have not done so already you may wish to consider appointing a lawyer to act for you.
Posted by vickiammundsen | August 4, 2014, 2:02 pmMy husband is a beneficiary of a Bare Trust which holds commercial property. The Trustee is a Company and the Directors of that Company will not act on my husband’s request to remove his shareholding out of the Bare Trust. The Directors just ignore all requests. What can we do? One of the Directors of the Trust Company has been living in one of the properties, even though he is a beneficiary and no other beneficiary has received the same benefit. My husband just receives a Special Purpose Financial Report for the Property Syndicate, which contains very little information. They are corrupt individuals and we don’t trust them anymore. We have put a caveat over the properties as they were attempting to sell them without my husband’s consent.
Posted by Lisa | August 27, 2014, 1:29 amIt is important to appreciate the difference between the rights of beneficiaries and the rights and obligations owed by trustees. While beneficiaries can indicate their wishes, it is the trustee that makes the decisions regarding trust property. As you describe this trust as a bare trust, it is less clear what discretion the trustee might have. In a conventional sense a bare trust exists where property is held by a trustee on the basis that the trustee will transfer the property when / as directed. However, based on your comments the trust appears to be operated as a discretionary trust. Also, given the concern expressed regarding the trustee’s actions your husband may wish to consider seeking the removal and replacement of the trustee. Legal advice should be sought to clarify the options.
Posted by vickiammundsen | August 27, 2014, 10:08 amhi one of our family beneficiaries asked our trustee if she could have access to trust documents,the trustee said yes what the beneficiary did next was photo copy some of the minutes from a few years ago keeping in mind that this was brought up in the minutes with no decision the question was asked to allow 2 ex-beneficiaries back into the trust the beneficiary brought this up at the last meeting and presented the copied documents
can this beneficiary be prosecuted for fraud?
Posted by les harmer | January 12, 2015, 5:33 pmThank you for your question, which is highly fact specific. Accordingly, we suggest that you seek legal advice.
Posted by vickiammundsen | January 19, 2015, 8:24 am“As a beneficiary of the trust you are entitled to see the trust accounts and to request information about the operation of the trust. Information that beneficiaries can request includes the deed of trust and any deeds of variation, the trust’s accounts, details of all distributions of capital and income and who the distributions were made to (distribution is another term for payment) and full details of the trust’s assets and liabilities.”
What is the source of this? I need to cite it. Thanks!
Posted by NZBeneficiary | January 18, 2015, 2:47 pmSchmidt v Rosewood Trust [2003] UKPC 26; [2003] 2 AC 709
Foreman v Kingstone [2004] 1 NZLR 841
Review of the Law of Trusts – A New Trusts Act for New Zealand, August 2013, pp 103 – 106 (lawcom.govt.nz)
Posted by vickiammundsen | January 19, 2015, 8:22 amReview of the Law of Trusts – A New Trusts Act for New Zealand (lawcom.govt.nz)
Schmidt v Rosewood Trust Ltd [2003] 2 AC 709
Foreman v Kingstone [2004] 1 NZLR 841
Breakspear v Ackland [2008] 3 WLR 698
Posted by vickiammundsen | February 3, 2015, 2:57 pmIf the settlor of a discretionary trust passes away and the trust is active til 2025 can the trustees appointed sell up properties etc and disperse of the trust early?
Posted by Ang | February 3, 2015, 1:47 pmWhether or note the trustees have a power to wind up the trust before the final vesting date will depend on the terms of the deed of trust.
Posted by vickiammundsen | February 3, 2015, 2:52 pmI am a beneficiary in a trust in which the trust composition is comprised of two trustees, lawyers from the same firm and a trustee who happens to be a beneficiary. I have asked the trustee (lawyer) for a statement of trust assets and any variations from the original trust deed, he has refused on the basis he has not been authorised to release the information, does he have any legal grounds to withhold this information?
Posted by John Drag | February 16, 2015, 11:09 pmAn increasingly common scenario. Where there are three trustees, unless the deed provides for majority decision making, all of the trustees will need to be in agreement to release the information that you have requested. However, in the event that the trustees continue to refuse to provide the information requested you can consider the option of seeking court directions. While this course of action is not without cost; where trustees have not provided information that a beneficiary is entitled to see in a timely fashion, there is a significant risk that the trustees could be required to meet the beneficiary’s court costs.
Posted by vickiammundsen | February 20, 2015, 8:35 pmIf a trust is wound up and final distributions of assets are made at a given date and a year later further cash assets (circa 100k) belonging to the trust are discovered can the trust be re-opened to make a further distribution? Is this clear cut or what are the difficulties in law with this scenario if any. Is their case law to support a further distribution?
Posted by Derek | February 25, 2015, 3:56 pmThe further assets must be distributed as they are still held for the beneficiaries pursuant to the terms of the trust. The fact that the trust was wound up does not negate this, and as all of the assets have not been distributed, the trust has not been wound up. Care will be required to establish what discretion the trustees have regarding how these assets are distributed. Legal advice is recommended.
Posted by vickiammundsen | February 27, 2015, 8:03 am‘However, if the trust is a discretionary trust (most family trusts are) the trustees can generally decide which beneficiaries to favour (and which not to).’
What specifically, do you mean by ‘favour’ above?
Thank you.
Posted by Margot Duane | March 5, 2015, 8:57 am> “However, if the trust is a discretionary trust (most family trusts are) the trustees can generally decide which beneficiaries to favour (and which not to).”
What did you mean by ‘favour’ above?
Thank you.
Posted by Margot Duane | March 5, 2015, 8:58 amDistributing income or capital.
Posted by vickiammundsen | March 5, 2015, 11:39 amI am the executor of my father’s estate. How can I ascertain what his assets were? (I have no access to his records and reside overseas.) Thank you.
Posted by NZExecutor | March 5, 2015, 11:24 amIt is the executor’s job to identify all of the assets and liabilities of an estate. It is not possible for the terms of the will to be complied with before this is done so. If the executor is unable to do so, it may be appropriate for the executor to renounce the appointment and for an executor to be appointed who is able to do so.
Posted by vickiammundsen | March 9, 2015, 10:49 pm> Distributing income or capital.
‘Favour’ implies (to me, at least) that such distributions don’t have to be equal. What if equal distribution among siblings is stipulated for in the Trust deed? Thanks.
Posted by NZExecutor | March 5, 2015, 11:42 amIf the terms of the trust do not give the trustee any discretion then the trustee is required to act in accordance with the terms of the deed of trust.
Posted by vickiammundsen | March 9, 2015, 10:47 pmTo dissolve a Trust: Is there a signature necessary witnessed by an Solicitor of the High Court of New Zealand? I’m living as an Kiwi in Germany.
Posted by Kaus Salmen | April 26, 2015, 12:15 amThe requirements will likely be set out in the trust deed.
Posted by vickiammundsen | January 2, 2017, 7:54 pmmy trustee died, can he leave his son in charge now?
Posted by Sarah | April 27, 2015, 8:43 pmWhen a trustee dies – whether or not the trustee can appoint his son as new trustee depends on the term of the trust instrument. So the first question might be are there other trustees? Next question might then be – is there a minimum number of trustees? Once those questions are addressed it may (but not necessarily) require the appointment of a new trustee – how this is done will be in accordance with the trust document – if that doesn’t provide the answer – it may be necessary to revert to the Administration Act or the Trustee Act. It may be that the terms of the trust document allow the appointment of a new trustee by will or by deed. However, more information and enquiry is required to answer your question.
Posted by vickiammundsen | May 18, 2015, 10:53 pmHi there,
Long story short.
at a recent Meeting, all land owners who attended, said no/ disagreed with the topic, and the final outcome , the Trustees said ok/agreed “against” the land owners /beneficiaries.
Note; the Trustees did not inform the beneficiaries with the final outcome.
I had to contact them for an answer.
is it legal for a Trustee to go against land owners/ beneficiaries?
Any help will be much appreciated.
Thanks
Posted by Tane Lawless | May 15, 2015, 9:07 pmMore facts would be required before any useful comments might be made.
Posted by vickiammundsen | January 2, 2017, 7:53 pmWhen making a high court application to try and remove a trustee what length of time would you expect it to take until you could get a hearing form point of application. Thanks
Posted by jeff mcmiken | May 25, 2015, 5:19 pmIt depends on the nature of the application. Where there are grounds for urgency applications can be heard very promptly. Otherwise the time frame can be significantly longer – but this will depend on which court and the issues. 12 to 18 months might be a reasonable time-frame to allow for.
Posted by vickiammundsen | January 2, 2017, 7:51 pmHi Vicki, could a company become a discretionary beneficiary under a trust?
Posted by Michael | June 5, 2015, 10:57 amYes. However, where a distribution is made to a company there can be tax consequences if advances to the trust have been forgiven.
Posted by vickiammundsen | January 2, 2017, 7:48 pmHi I’m currently managing my 7y old daughter trust from her father who passed away but having some problem with the way trustee is handling and rejecting most of my requests so i wanted to ask where can i go to ask for help or assistant so dat they can deal with them cause I’m tired of how they don’t want to help even when the money is enough
Posted by mulalo | July 4, 2015, 11:23 amWe recommend that you seek legal advice.
Posted by vickiammundsen | January 2, 2017, 7:47 pmAs the Settlor of a Family Trust (Discretionary), and also Co-Trustee (the only other Trustee is a Solicitor acting in the capacity of a Trustee Company, and with limited liability clauses applied in their Trustee capacity within the Trust Deed) can the Settlor demand that the Trust be “wound up” or the assets divested well before the 80 year Trust end date, and thus demand that the proceeds then made available to the Preferred Beneficiary (which in this case would also be the Settlor)? Any discretionary beneficiaries would then not become beneficiaries given that the assets of the Trust had been removed by the Settlor/Preferred Beneficiary, for whatever purpose. In this particular case, being both the Settlor, Co-Trustee and Preferred Beneficiary, we presume that we maintain the most favourable position possible BUT this position is suddenly turned on its head 180 degrees in the event of my death, and suddenly the Trust assets are controlled solely by a Solicitor who has no obligation to look after the interests of any Discretionary Beneficiaries, and may seek to favour the remaining Trustee in any way they so wish – or to some unfavourable degree according to any Discretionary Beneficiary potentially. Therefore to eliminate an unfavourable outcome for the Class 1 Discretionary Beneficiaries post the death of the Settlor/Preferred Beneficiary/Co-Trustee, would it not be wise to wind up the Trust and then re-write the trust deed with provisions that favour the intended persons who are the children of the Settlor/Preferrred Beneficiary/Co-Trustee, whom based on the content within the Trust Deed are basically going to be placed at the mercy of the other Trustee in all respects, when this is definitely not the intention of the Settlor, but has occurred due to the Solicitor (and co-Trustee) having provided the entire Trust Deed, and such appears to be severely tilted in favour of the Solicitor in terms of the powers vested within the Deed, due mainly to us being somewhat naieve some years ago when the Trust Deeds were drafted up by the Solicitor and presented to us as being simply a “‘standard deed”, but upon recent inspection appear to favour the Trustee much more than any beneficiary….which could place the beneficiaries at risk from gaining either the assets or any regular distributions via the Trust. I have thought about simply inserting a clause within the deed which automatically elects all beneficiaries to Trustee status immediately upon the death of the Settlor, on equal terms no less than the other Trustee (our current Solicitor), and then insert another Clause which provides for any 2 Trustees to be permitted to make decisions pertaining to Trust assets, without the consent of the 3rd Trustee (adopt a majority rules policy).
However in reviewing the Trust deed, it appears to favour the existing Co-Trustee so significantly that a complete overhaul of the Trust deed would be necessary to adequately protect the interests of the intended beneficiaries (who remain at this time as discretionary only). Even if we upgraded the status of the beneficiaries from “Discretionary” to “Preferred”, I would not feel comfortable. And if we overhaul the Trust Deed in the manner we would feel comfortable to adequately protect the children as beneficiaries, then the Solicitor (Co-Trustee) would see clearly what we were doing and therefore I sense he would become unhappy and such could end our association as client/solicitor and also our positions as joint Trustees could become somewhat tense given my seeking to tighten up the Deed significantly, to the detriment of the Solicitor obviously…so can we bail out and simply have all assets transferred into another existing or newly formed Trust which would encompass my wishes more favourable onto the beneficiaries if I passed away suddently, or is this process unable to occur due to some legal reason? None of the 5 Trusts involved have any debts, only assets. Hope you can help? Thanks in advance. Gavin
Posted by Gavin Perry | July 22, 2015, 4:12 amSubject to the terms of the deed of trust settlors have little ability to control a trust once settled. See Tarasiewicz v Titford [2013] NZHC 3466
Posted by vickiammundsen | January 2, 2017, 7:32 pmi am 21 i want to use my trust fund but it says i have to be 25 i have a baby on the way and want to buy a house my mum who left me it died 3 years ago my nana who is a trustee will allow my brother who is 24 to use it to buy a house even tho he allready owes one i do not want to spend 40k on rent in the next 3 years and would rather be saving for my kids future if any one can help me out i would be verry thankfuk
Posted by connor | September 21, 2015, 11:13 pmThe starting point would be a formal request to the trustee.
Posted by vickiammundsen | January 2, 2017, 7:21 pmI am the beneficiary to my fathers trust he left my brother and I for when we reach the age of 25. Is there anyway I can find out what his assists and estate were at his time of death and of the trustee is wrongfully spending what is rightfully mine?
Posted by Shannon | November 4, 2015, 7:45 pmBeneficiaries are entitled to ask for information about a trust. Trustees have a discretion whether to provide the information requested. See Erceg v Erceg [2016] NZCA 7 (since appealed to the Supreme Court).
Posted by vickiammundsen | January 2, 2017, 7:18 pmIs the x partner of one of the beneficaries able to get anything out of the family trust.Are they intitled to assets/money because they had been married for over 15years? It is written up that they don’t be included financially so therefore could they break in to the trust get anything?
Posted by Miss Gray | December 29, 2015, 3:50 amThis will depend on individual facts. See for example Clark v Clark [2012] NZHC 3159
Posted by vickiammundsen | January 2, 2017, 7:16 pmHi there, we are in the process of winding up our family trust which owns a company that owns several properties. We are going to distribute the properties to the beneficiaries of the trust since our father has passed away 5 months ago.
The properties will be transferred to the trust then distributed to the beneficiaries then the company liquidated and the trust wound up also.
We have an independent trustee who is a lawyer, a shareholder of the company and also one of the executors of the will (as am I). We are concerned that the lawyer, being a shareholder in the company and a trustee could drag the distribution process out or even worse be entitled to a share of the estate, even though he is not a beneficiary.
Could this happen ? And is there a reasonable time frame for estate distribution ?
Posted by Lynette Kelland | January 12, 2016, 11:54 amThe time-frame for the distribution of an estate depends on a number of factors. However, when a significant period of time passes without the estate being distributed it may be necessary for the trustees to be replaced with trustees who will be able to better progress the distribution of the estate. See Harvey v Harvey (1996) 1 NZTR ¶6-003
Posted by vickiammundsen | January 2, 2017, 7:13 pmHi, can a trust have only one trustee? Or does it have to have 2 or more? And do I HAVE TO include an ‘Independent trustee’ aswel(lawyer,accountant…)??? Or am I able to just appoint anyone?, And after the initial lawyer fees to set everything up, are there any ongoing fees afterwards ??? And are there any limits to what I can put in the trust deed terms? Thanks
Posted by s.i | January 22, 2016, 5:49 pmA valid trust can exist where there is a single trustee who is not independent from the trust. However, as a practical matter, risks can flow where the settlor retains too much power. See Clayton v Clayton [2016] NZSC 29
Posted by vickiammundsen | January 2, 2017, 6:57 pmDoes the settlor have any power over the trustees, say If they implement terms into the ‘trust deed’ that he/she the settlor is to have the power to remove or replace the trustee??? Is it possible?
Posted by s.i | January 22, 2016, 6:22 pmTrust deeds commonly provide that the settlor or some other person has the power to remove and appoint trustees.
Posted by vickiammundsen | January 2, 2017, 6:55 pmParents set up an irrevocable trust fund, which is released on both parents demise to three beneficiaries. Parents are not trustees, only grantors. Trustees are a financial company service. Three beneficiaries are all siblings and adults. One beneficiary has been requested (by parents) to sign to dissolve the trust fund, without the knowledge or signature of the other two beneficiaries. Can the fund be dissolved in this manner? And if so is the one beneficiary liable for future claims by the other two beneficiaries for causing them determent?
Posted by KCbeneficiary | February 22, 2016, 10:46 pmGiven your advice that the trust is irrevocable it seems unlikely that the trust can be revoked in the manner you suggest. Where a trustee has acted in breach of trust, it is the trustee who is generally answerable for the breach and any losses that might flow from it.
Posted by vickiammundsen | January 2, 2017, 6:53 pmcan i sell my share in my trust i am the trustee and beneficiary
Posted by Graeme Case | April 5, 2016, 3:10 pmUnless the trust is a unit trust, beneficiaries do not generally have “tradable” interests in a trust.
Posted by vickiammundsen | January 2, 2017, 6:03 pmWhat are the rights and responsibilities of an income beneficiary? Are they able to give trust money to a one captial beneficiary and therefore favour that beneficiary over others? If so would any payments need to be repayable/taken into account when final distributions are made?
Posted by Margaret | April 15, 2016, 11:17 amBeneficiaries have no responsibilities as such, benefitting by virtue of being beneficiaries. However, trustees of a trust where there are income and capital beneficiaries must balance the rights of the income and capital beneficiaries. See Manukau City Council v Lawson (No 2) (2000) 1 NZTR ¶10-009 where Paterson J points out that the duty of trustees to act with strict impartiality between income and capital classes of beneficiary is “a well established principle.”
Posted by vickiammundsen | January 2, 2017, 6:02 pmMy first question :
I have a Friend who would like to wound up her family trust she is the Settlor of the trust , trustee and also the beneficiary ,the brother is the other trustee does she need the Approval of the beneficiaries ( her two daughters on this case ) to wound up the family trust ?.
My Second question :
While the above person ,Settlor,trustee and also beneficiary is alive and using the Family trust as Homestay ( getting an income for Herself ) can the Beneficiaries (her Two Daughters ) get together and force the sale of the House and get their share of the trust .
Thank you for your help on this Matter
Posted by Gerard Averous | May 15, 2016, 10:35 pmThe answer to each of your questions can be found in the terms of the trust. However, by way of general observation trustees act in accordance with their discretion. Further, beneficiaries have no “share” of a trust unless or until the trust vests, in which case the final beneficiaries receive the trust property in accordance with the terms of the trust.
Posted by vickiammundsen | January 2, 2017, 5:53 pmWe have a will that leaves house to 5 and can only be sold if all 5 agree. The only trustee has let one person live for free in house for over 3 years and spent most of the money from bank account on house, again only benefiting one person. We get no correspondence from him and he won’t answer questions. Arnt all 5 supposed to benefit?? And can he order house to be sold on grounds of unworkable situation?
Posted by Margo donnelly | May 25, 2016, 11:51 amIf the trustee of the estate is not acting in the best interests of the beneficiaries it may be appropriate to seek the removal of the trustee and the appointment of another trustee. See Re Estate Farnsworth (1999) 1 NZTR ¶9-001 and Harsant v Menzies [2012] NZHC 3390
Posted by vickiammundsen | January 2, 2017, 5:47 pmHi I have a question about our family trust I have three sisters and myself . We have shares in Farm land and money coming from rent of the land is going into that trust account am i myself entitled to my share to be transferred to my own account .
Posted by Rangi Reihana | July 27, 2016, 12:43 amThe starting point for this enquiry would be to raise this with the trustee. Alternatively if all of the beneficiaries wish to terminate the trust (and they are all adults) you may wish to explore whether the rule in Saunders v Vautier might be of assistance.
Posted by vickiammundsen | January 1, 2017, 11:55 pmOk so my grandfather left me a prepaid college fund so I would be able to do well once I grew up im the beneficiary and my mother is the trustee, my grandfather is currently deceased, now I do attend my college but I’m also a little behind on car repairs and a couple bills when I asked my mother to let me take a portion out she declined, but before I attended college I didn’t want to go and she was about to transfer it to my uncle so he could pay off his car, so I decided to go to at least have what’s mine, would she be in breach of the trust for doing an act like that for punishment for me refusing to want to attend that year to work a full time job instead? I’m also 21 years of age and was wondering if I could somehow make myself a trustee. Please hit me back and thank you- tanner
Posted by Tanner W Furr | August 1, 2016, 9:35 pmThank you for your e-mail. Trustees are obliged to act in accordance with the terms of the deed of trust. Where trustees act capriciously or for motives other than the best interests of the beneficiaries the trustees can be in breach of trust. As to whether you can become a trustee, this will depend on the terms of the deed of trust.
kind regards,
Posted by vickiammundsen | January 1, 2017, 11:58 pmHello, I want to check that the information contained in this document is still current. My father set up a family trust and is now in a rest home. My brother is acting as POA and my father’s friend is the Trustee of the trust. Both are denying me access to information. I believe my brother has been taking money from the trust, and I know that very poor financial decisions have been made e.g. not applying for the rest home subsidy when my parents went into a rest home (my mother has since passed away). I am now going to send a letter by registered mail to the Trustee requesting to see the Trust Account and Deeds of Trust and any Variations of Deed of Trust. Do I have a right to this information. I am being told that I am not. Thanks
Posted by Christina Gera | August 3, 2016, 11:03 pmA beneficiary can seek information from trustees about the trust. Whether or not the trustees provide the information requested is at the trustees’ discretion. Where trustees will not provide information about the trust a beneficiary can seek the assistance of the court. See Erceg v Erceg [2016] NZCA 7 (under appeal).
Posted by vickiammundsen | January 2, 2017, 5:41 pmHow. Do you change a trust, or desolve the trust as not a benefit to you anymore, as was started only when the trust stopped house from being sold, if one partner went into a home, one partner has died, so trust not a benefit, how to close, and just put in the will.
Posted by Mrs Kitchen | September 2, 2016, 1:45 pmThe starting point will be to discuss your wishes with the trustees. It would also be prudent to review the terms of the trust to establish whether the trust vesting date can be brought forward. However, before doing so it would be wise to establish what your position will be if the trust is wound up (presuming the trust property is distributed back to you) and you require long term residential care.
Posted by vickiammundsen | January 2, 2017, 5:38 pmA friend was used as settlor. Now parted ways and moved on. What next?
Posted by Julia Alcorn | September 10, 2016, 3:15 pmThank you for your question. The identity of a settlor is a matter of fact. However, once settled a trust can exist independently of the settlor. That said, it is important to consider the terms of the deed of trust to establish whether any powers have been reserved to the settlor such as the appointment and removal of trustees and beneficiaries.
Posted by vickiammundsen | January 2, 2017, 12:05 amCan a beneficiary of a trust, that has a Protector provision allowing Protector to remove a Trustee, direct Protector to remove trustee if Protector finds that the trustee acted in bad faith with regard to the purpose of the Trust? If not, can the Beneficiary express a desire that the Protector remove the Trustee?
Posted by Link | November 3, 2016, 7:10 pmThank you for your enquiry. Depending on the terms of the deed of trust we suggest that it would be appropriate for the beneficiary to raise the beneficiary’s concerns with the Protector.
Posted by vickiammundsen | January 2, 2017, 12:04 amMy auntie from my grand-father’s second parter made a succession to my grand-father’s land and formed a trust in 1999..She told me and my brother.. (We are from his first marriage)That she put use in the trust..she is the Administrator and a Hone Raurangi (There is no such person)how would i find out if i am a beneficiary seems I can’t find her.haven’t heard from her since 1999
Posted by Maxine Hona | November 16, 2016, 11:32 pmThank you for your e-mail. The starting point is to establish whether or not a trust was settled and if so who the trustees are. To do this you may wish to review the titles of the land in question to establish who owns the land and whether they own the land personally as trustees. We recommend that you seek legal advice.
kind regards,
Vicki Ammundsen
Posted by vickiammundsen | January 2, 2017, 12:01 amIf a beneficiary is bankrupt in a family trust, can the IRD seek compensation from the trust before the death of the testator ?
Posted by smo | January 23, 2017, 12:18 pmIt is unclear as to whether you are referring to a family trust or a will. By way of general comment presuming it is a family trust, whether or not creditors can make a claim against the trustee(s) will depend on the nature of the beneficiary’s interests in the trust. For example if the beneficiary had a current account when the beneficiary went into bankruptcy the right to that current account would pass to the official assignee. Legal advice is recommended.
Posted by vickiammundsen | January 23, 2017, 5:54 pmWould it be perceived fraudulent to ask my family members to remove my name as a beneficiary( from a family trust/or will) in order to avoid creditors accessing funds due to my personal bankruptcy? Would those family members be charged with fraud?
Posted by smo | January 23, 2017, 11:21 pmWhether or not you can be removed as a beneficiary of a family trust will depend on the terms of the trust. Legal advice is recommended. Also see the High Court and Court of Appeal decisions in Erceg v Erceg regarding the impact of bankruptcy on the rights of final and discretionary beneficiaries.
Posted by vickiammundsen | January 24, 2017, 7:40 pmDo I, as a beneficiary, have a right to view the tax returns (or copies of) which the trustee has filed for a trust that is making passive income in term deposit accounts?
Posted by Britta | January 26, 2017, 10:06 amYou can ask the trustees for the tax returns. Whether they are supplied or not is up to the trustee who has the discretion as to what information to provide to a beneficiary. See the Court of Appeal decision in Erceg v Erceg (subject to appeal) and also the draft Trusts Bill.
Posted by vickiammundsen | January 29, 2017, 9:43 pmWhere a trust has been formed by a husband before a second marriage which includes the family home, upon the death of the husband what can the spouse do when she has no home of her own to move to ?. Can she make a claim against the trust? The beneficiaries of the trust are the husbands children from his first marriage. There are no children from the second marriage.
Posted by David Mairs | February 20, 2017, 2:21 amThank you for your enquiry. There are various avenues for remedies in the situation that you describe. By way of general observation these could include a constructive trust claim on account of advances made to the trust in the expectation of a benefit from the trust and relationship property claims in respect of dispositions of property onto the trust that are referable to the relationship. That said prevention is better than cure and if it is not too late it might still be possible to formalise some rights for the surviving spouse. Legal advice is recommended.
Posted by vickiammundsen | February 20, 2017, 8:10 pmI am a beneficiary of my mother’s estate and trust. My two siblings were EPoAs and one of them a co-executor of my deceased mother’s estate. They have insisted on me signing a Deed of Release before uplifting some chattels. This states: “On the basis that the executors attend to the distribution and finalisation of the residuary estate…the beneficiaries undertakes…Distribution to me of the personal chattels that have been allocated to me…will be in full and final settlement of my share of the estate and in consideration of receipt of the chattels I release and discharge the executors from all trusts in respect of my share of the estate.”
I am in a situation where I believe they abused their responsibility as attorneys in that they progressively removed chattels from my mother, who had dementia, over several years, such that most of her possessions were not on the list of chattels. i.e. I believe her estate should have included far more. If I sign this document to secure the few items distributed to me, before they are discarded, then does that preclude me from making a claim to the courts for their conduct as EPoAs.
Posted by Sibling | February 22, 2017, 2:35 pmThe Deed of Release should not be signed without seeking legal advice and canvassing with your lawyer whether you should take any action for a review of decisions made by your late mother’s attorney(s). You may also need legal advice regarding the trust you refer to eg who are the trustees of that trust and what assets are owned by this trust.
Legal advice should be sought.
Posted by vickiammundsen | February 22, 2017, 3:01 pmHi, my partner bought a house for his three siblings behind my back and put it into trust through a lawyer. Now that we are splitting up…..do I get a share of this house as been with him 10 years……he has said to me you don’t get a cent of this property….Julie thank you
Posted by Julie Paul | February 24, 2017, 5:16 pmWhether or not you can claim against this house under the Property (Relationships) Act 1976 will depend on amongst other things whether relationship property was used to purchase or maintain the property or whether your partner has rights in respect of the trust that comprise relationship property. Whether there are other avenues for claims will depend on the terms of the deed of trust and other relevant facts. Legal advice is recommended.
Posted by vickiammundsen | February 24, 2017, 5:35 pmThe executor of the will and trustee are the same person. Can the executor get a beneficiary to sign a rental agreement in the name of the estate without showing the trusts name. Or can they just sign their name without also including the title of trustee. Is the agreement invalid if it does not show these details
Posted by Carolynn | February 25, 2017, 7:11 pmTrustees act personally and so can enter into contracts in the name of the trustee. However, where the trustee does not specify that the trustee is acting in the capacity of trustee in some situations it can be difficult to determine whether the trustee is acting as a trustee or on the trustee’s own personal account.
Posted by vickiammundsen | February 26, 2017, 2:43 pmWe have been told that there is a conflict of interest with one trustee(muself) being on the trust of my deceased brothers trust and myself and another person trustees on my family trust. We hold a building in common in both trusts. My deceased brothers beneficiaries are threatening to remove me but all we want is for the building to be valued and then sold and to get rid of these two. Should we just allow them to go down the route of removing me as a trustee?
Posted by Maria Bremmers | March 3, 2017, 4:18 amWhether or not there is a conflict that is best addressed by the removal of you as a trustee will depend on the facts of the matter, which are not a subject for discussion in a forum of this nature. However, by way of general observation we suggest that this is addressed proactively, rather than through a removal application due to the costs associated with this and the risk of a costs award against you. Legal advice should be sought.
Posted by vickiammundsen | March 5, 2017, 5:14 pmCan you provide clarity on “facts of the matter.” I have replied proactively stating that i would like the building valued and sold. It is the beneficiaries of my brothers trust who are threatening the removal of myself which I feel is not the way forward; they are demanding that I stand down and if not ,will remove me which will incur considerable expense for them?
Posted by Maria Bremmers | March 23, 2017, 3:32 amAs noted in our earlier comment, this is not an appropriate forum to progress your enquiry. Legal advice is recommended.
Posted by vickiammundsen | March 23, 2017, 10:04 amWe had 6 siblings my father passed 2012 and left his will in care of trustee his 2nd wife. hHs previous marriage he had 3 children in which I am there oldest of. He remarried and she had a daughter and they soon had 2 children together. When he passed he had a revocable and irrevocable trust also trust in stock market. Correct me at any time I am not in any way knowledgeable at any of this I just know what I have been told and what I have read. So in this it states that she is trustee until she passes. Well on their it reads that their 3 children from 1st marriage is entitled to any properties accounts anything in his name and his alone. Then it states that their other 3 are entitled to that and anything after their 2nd wife passes in bother their names goes to their other 3. She passed in 2015. From 2012 to 2015 she some how had his place on their ocean put in her name changed everything around sold his business in which was in his name alone out from under us and did not tell us or their attorney for that matter as well. She she drew off their sale monthly and we did not realize we are at their very last distribution Aug 2017. We received 3 prior to this and it was after her passing them other 3 got there money off their sale but we 3 were unaware a year after his passing she informed me she was selling them stocking which he invested 9,000,000 shares in at 1 cent each it is to not do anything until it hits 1.00 last we were told it was at .21 cents. She told myself she found an attorney that was willing to cash it in at .35 and when it hit she was cashing in did not ask how I felt she told me. Now the list of trustees there after did not want to be involved my sister at very end of list took it we do not get along she does not follow as he requested does not contact us we do not know where she is her address or phone number. Before he passed he said to my sister and I we were going to have to get our own attorney to get what was ours bc his wife and daughter were not gonna be equal when it came to my sister and I. My little brother of them 3 of us has just passed him self so it’s the 2 of us and then 3 of them. Please please I need some help bad… There is a great deal here and it so not right for thos to be happening. I mean this is what us to be our not to mention any personal we were never allowed back on home after his passing.
Posted by Selena Whitehead Roberts | March 25, 2017, 6:22 pmThank you for your comments. Legal advice is recommended.
Posted by vickiammundsen | March 25, 2017, 6:43 pmIf a beneficiary requests information from a trustee such as trust accounts and statement of trust’s assets and liabilities can the trustee require him/her to pay $380 per hour for his time before he is willing to give the information?
Posted by Eileen Williams | April 2, 2017, 1:00 pmGood question. The draft Trusts bill provides that:
46 Beneficiary may be required to pay cost of giving information
A trustee may require the beneficiary to whom trust information is given under
section 44 or in accordance with the terms of the trust to pay the reasonable
cost of giving that information.
This bill is not law yet, but it does give reasonable guidance. What is reasonable is the question. We suggest that the costs referred to are the costs of providing the information eg copying costs, rather than legal fees for advice relating to the information.
Posted by vickiammundsen | April 2, 2017, 3:06 pmThe trustees have retired , the trust is now a duly incorporated company , those trustees are now directors. How does this now impact on beneficiaries rights? What rights of disclosure were due to beneficiaries prior to undertaking this action?
Posted by clyde | April 8, 2017, 1:42 pmThe disclosure obligations still sit with the trustee.
Posted by vickiammundsen | April 9, 2017, 4:05 pmwhat are the rules, process and documentation requirements with regard to instances of self dealing, (double dipping). It appears that a salary has been claimed by trustees to manage work, that was undertaken for the trust by a company owned by the trustees, hence possibility of profit being taken twice once via company invoice, and again via salary.
Posted by Piper | April 8, 2017, 2:00 pmWe suggest that you review the deed of trust to see what trustee remuneration is permissible. Trustees are not entitled to be paid as of right. Payment must be provided for pursuant to the terms of the trust.
Posted by vickiammundsen | April 9, 2017, 7:10 pmMy partner lived on his familys trust lifestyle block 22yrs always having the promise from his father that it would be put in a trust for him as was done for his siblings. I had this confirmed in a conversation with his father last October. Then things changed his 2 younger brothers are the trustees and have had little to nothing to do with him for years. They have made poor financial decisions reguarding the trust and are now wanting to sell the lifestyle block. They refuse to comply with a request for financials from the trust and have just sold their sisters house roughly 200k and tell her the money is all gone. She has now.gone from living in a freehold home to having to flat/rent with a friend.Both brothers have their own trusts which the property their parents bought them and other assets have been placed in. 2 weeks ago my partner was told he would have a week to get all his property from 20+ years off the block …Pretty much impossible as he also ran a panel and paint shop from home and still has clients cars and parts there. He has not had access to the property for the last year due.to legal matters with his x. Today he has been told that at midnight a trespass order goes on …is that even legal? ? Surely as they have a legal obligation to act in the beneficiarys bests interests this is a contradiction? ? We want to fight this yet don’t have unlimited funds it just seems so unjust and wrong.
Posted by Brogan | April 17, 2017, 8:52 pmA lot of information is required before a response is possible. We strongly recommend legal advice as a matter of urgency.
Posted by vickiammundsen | April 17, 2017, 8:55 pmHello Vicki,
The executor of my late sisters will has told us who the beneficiaries are but neither he nor the lawyer will give us a copy of her will, this is now creating a feeling between beneficiaries that something is a bit odd that this be kept secret . Are we able to obtain a full copy of her will from the high court, her assets have now been put into a trust and nothing has been said to us about that either.
Another point is I have been renting my late sisters unit for the last for years and she told me that the unit will be left to me and that she had put it in her will, do I continue paying rent in the meantime?
Your answers would be most appreciated as I know little of what rights a beneficiary has in these matters.
Thanking you,
Charmaine Goodwell.
Posted by Yvonne Christian | April 18, 2017, 12:57 pmCopies of wills that have been probated can be obtained from the High Court. We suggest that you raise your question regarding rent with the executor / trustee of your sister’s estate. Once you have a copy of the will we recommend that you seek legal advice.
Posted by vickiammundsen | April 19, 2017, 12:23 amLast year I found out the accountant who filed my tax returns for the past 10 years had included beneficiary distributions as income, but I never actually received any money. My mother who had POA used the same accountant and until last year I was not aware I was a beneficiary. In the last 6 months my mother’s mental health deteriorated so I canceled the POA. My mother got angry and then changed her trust and removed me as a beneficiary. She has now passed away and I have found out I have been removed from her will as well as the trust. Am I entitled to the beneficiary distributions which are on my tax returns and is there any way to challenge a trust?
Thanks.
Posted by Maileen Aiken | April 29, 2017, 3:13 pmThank you for your enquiry. Your message raises a number of issues and we recommend that you seek legal advice. However, as a general observation we suggest that demand is made for the amounts showed as having been credited to your beneficiary current account and accounted for tax but not paid to you.
Posted by vickiammundsen | April 30, 2017, 1:43 pmShould one wish to request the court to remove a trustee is there a process that needs to be applied
Posted by Bonnie | May 8, 2017, 5:23 pmThe form of the application will depend on the grounds for removal. Legal assistance is revommended.
Posted by vickiammundsen | May 8, 2017, 6:55 pmI feel that my interests as a beneficiary are not being addressed by the current trustees , and am aware that one can request the court to appoint a trustee to a trust to act to protect those interests, is that someone I as an individual can action by the following of a prescribed process, or is it necessary to go via a lawyer.
Posted by Peter | May 8, 2017, 5:28 pmThere is nothing to prevent you bringing proceedings and representing yourself. However, legal advice is recommended.
Posted by vickiammundsen | May 8, 2017, 6:53 pmMy mom past away in January and my brother, the executor, didn’t notify the trust lawyer until April. I was given 1/2 the house and my brother is suppose to buy my part, he has lived in the house for the past 7 yrs with our Mom. He already moved a friend in that is paying rent, hopefully going to the trust. I feel he isn’t doing his job as executor since had to hire a lawyer to get a copy of the will from the Trust Lawyer… Is there a time period he has to settle the trust and is it legal for him to move someone in the house without my agreement, since I am a beneficiary of 1/2 the house?
Posted by George | May 15, 2017, 10:12 amWe are unclear what jurisdiction you are in (New Zealand or elsewhere in the world). We recommend legal advice from a trusts and estates lawyer.
Posted by vickiammundsen | May 16, 2017, 1:36 amThe house is in California, and we live in Texas.
Posted by George | May 16, 2017, 4:35 amWe recommend local legal advice.
Posted by vickiammundsen | May 16, 2017, 9:41 pmHi there,, I am in Australia but the drama is going on in NZ, and no Australian Lawyer can give me advice on NZ law,
Woman (unknown ) enters nursing home and gets my 95 year old Grandma to change her will,, this women is now the trustee , I have a copy of the new will and I am a beneficiary at the end of 20 year period,,, all the money from the sale of the house and all the possessions (are in storage ) have been sitting there for 7 years, she is trying to move the money to another law firm,,, I really don’t know what to do ,,as the agency who is holding the money is working on her behalf, she is going to get the entire estate ,, some people !!
Posted by jay | May 16, 2017, 2:16 amIf you are concerned about the course of action the trustee is taking, an appropriate response could be to seek the assistance of the High Court and to either have the trustee’s actions reviewed, or alternatively to seek the appointment of a new trustee in place of the current trustee.
Posted by vickiammundsen | May 16, 2017, 9:43 pmSounds great how do I do that from Australia ? is there a link you could send me ?
Posted by jay | May 17, 2017, 4:51 pmDo the elderly siblings have to pay for a brothers funeral if he has no assets or money in nz
Posted by Jos Ratana | June 2, 2017, 4:53 pmThe person or persons who entered into the contract with the funeral home will generally be liable in the first instance. We suggest that the matter is raised with the brother’s executors regarding what provision has been made for the payment of funeral expenses.
Posted by vickiammundsen | June 14, 2017, 12:33 amCan a trust deed be amended so that a final beneficiary is removed as a discretionary beneficiary? The deed of variation was signed by the new trustee in December 2016, however, the deed of appointment of new trustee wasn’t signed until January, 2017. Would this mean the amendment is invalid? Thanks.
Posted by Karen | June 13, 2017, 6:17 pmWhether a final beneficiary can be removed depends on the terms of the deed of trust. We recommend legal advice is sought regarding the deed of variation to confirm its validity, which appears questionable.
Posted by vickiammundsen | June 14, 2017, 12:32 amHi
Can a Trustee also be an employee of a Trust
Posted by Leanne Karauna | June 23, 2017, 10:34 pmA trustee can be employed by a Trust if permitted by the terms of the Trust.
Posted by vickiammundsen | June 23, 2017, 11:27 pmIf 2 siblings were named as Final Beneficiaries and Discretionary Beneficiaries in the original Trust Deed, and the Settlor has since decided this Trust will be for the sole benefit of one child as the other will be financially taken care of through other holdings, can a Deed of Variation remove a final beneficiary, (or is this a major enough change to constitute a resettlement)? If so, would it need to be signed by the beneficiary being removed, not just the Trustees and Settlor, to be valid?
Note – the Trust Deed specifically allows for adding or removing Discretionary Beneficiaries, and allows variations with permission of the Settlor, but does not inherently have a mechanism to vary the Final Beneficiaries. Also the end result is the Settlor wants to be even handed to both children and the assets outside the Trust are equal in value to what the Trust owns.
Thanks.
Posted by Ruth Cleaver | July 6, 2017, 2:42 pmWhether a final beneficiary can be removed will depend on the terms of the trust. However, given the information noted by you, consideration of the settlor’s wises is also relevant. We recommend legal advice.
Posted by vickiammundsen | July 17, 2017, 9:36 pmHi, I’m guessing this is a common situation in NZ..
A discretionary family trust was created several years ago to allow my parents to borrow money for alterations to be made to their home.
The settlor’s (father) intention was always that the property was to be eventually sold and distributed evenly among his 5 children unless required for his wife’s care until her death. Although I know this is not specifically stated in the trust deed.
Two (2) of 5 final beneficiaries were also appointed trustees. Both parents (settlor and beneficiary/wife) have long since passed on. One (1) beneficiary opted to take his ‘share’ out when one of the trustees was in a position to offer. Now there are 4 remaining beneficiaries, 2 of whom are trustees.
It is worth noting that only 1 beneficiary has never performed the role of a trustee. And that 1 trustee has been constant since the creation of the trust.
The property has not ever been satisfactorily maintained and is now in a state of disrepair.
The 2nd current trustee/beneficiary and remaining beneficiaries want the trust wound up and the property sold.
I am aware that a discretionary trust has different implications to the extent that a trustee can make such decisions. However, there are 2 trustees and 4 highly intelligent people who are aware of the settlor’s intentions.
What recourse do you believe we have through a court of law?
thanks
Posted by Lis | July 17, 2017, 6:45 pmSettlors wishes are more commonly recorded in a memorandum or letter of wishes. A beneficiary who is concerned with actions being taken by the trustees can seek the assistance of the High Court pursuant to s 68 of the Trustee Act 1956.
Posted by vickiammundsen | July 17, 2017, 9:34 pmthank you. I’ll start with that section of the act.
Posted by Lis | July 17, 2017, 9:42 pmMy Grandson has a unit trust (bonds) set up for him by his grandparents in Scotland. The funds were left to my grandson by his late father and his grandparents took it upon themselves to create a trust for my grandson from these funds). They have always stipulated that he would receive his trust fund at 18 years of age (and this is documented) But now that he has reached 18 they don’t want to give it to him (and they don’t want lawyers involved which is suspicious?) Is there anything my grandson can do to vest the trust fund (I had heard that he could sign a statutory declaration of identity and ask for all moneys and assets to be transferred to him but we have no idea how to do this without a lawyer which we cant afford! Are there forms to fill out?
Posted by Lois | July 19, 2017, 6:42 amWe recommend legal advice, notwithstanding your comment that you cannot afford this. As a general comment, your grandson might consider an approach directly to the Unit Trust that holds the bonds advising that the bonds are held in trust for him until age 18, with evidence of the same.
Posted by vickiammundsen | July 20, 2017, 12:54 pmCan the trustees allocate shares and equity land to one beneficiary without other beneficiaries knowing? thanks
Posted by Bridget Robinson | July 21, 2017, 7:33 pmIf a trust is fully discretionary as to income and capital, the trustees can make distributions to one beneficiary and not another. Whether there is an obligation to notify other beneficiaries about the distribution will depend on the terms of the trust. If a beneficiary asks for information the trustees may (subject to the terms of the trust deed and the relevant trust law) be required to provide the information requested.
Posted by vickiammundsen | July 23, 2017, 2:23 pmWhat is the role of the protector in a Trust? Do they have certain responsibilities to uphold?
Thank you.
Posted by J. Deadmarsh | August 8, 2017, 4:01 amThe role of the protector depends on the terms of the deed of trust. For more information about protectors see https://mattersoftrust.co.nz/2012/07/29/protectors-do-they/
Posted by vickiammundsen | August 9, 2017, 1:03 amThe new trust act advises that there is a duty to act for no reward
A trustee must not take any reward for acting as a trustee, but this does not affect the right of a trustee to be reimbursed for the trustee’s legitimate expenses and disbursements in acting as a trustee (see section 77(2)).
Under the current act , what is the legal standpoint / implications of trustees receiving a salary
Posted by Alex | August 8, 2017, 9:23 amWhether a trustee can be remunerated depends on the terms of the deed of trust. See https://mattersoftrust.co.nz/trust-law-update/white-v-williams-a-bad-day-to-be-a-trustee/
Posted by vickiammundsen | August 10, 2017, 8:55 pmI have been married for 28 years ago and my mother in law died two years ago. I have recently discovered that my husband set up a trust (after we were married) to allow for his inheritance from her estate. Does this trust form part of our marital property? Thank you
Posted by WIFE | August 10, 2017, 4:26 pmTrusts are not property as such. However, right in respect of trusts can be for relationship property purposes. We recommend that you seek legal advice. See Clayton v Clayton https://mattersoftrust.co.nz/2016/03/23/the-supreme-court-writes-back/
Posted by vickiammundsen | August 10, 2017, 5:03 pmMy sister and I are 2 of the named 4 primary beneficiaries in a family trust. Our mother dies back in 2012. She was a Settlor, Trustee and primary beneficiary, also. Since her passing, we have been denied any information we have requested from the surviving Trustee- her husband – about the Trust and feel he may be in breach of his obligations. We have written a letter to the firm who holds the Trust document explaining our experiences and ongoing concerns regarding the management of the Trust. What is a reasonable time to wait for a reply? Are we even likely to get a reply? What is the procedure we would need to follow to apply to the court? (Given that my sister and I live in Australia, this matter is certainly based in New Zealand, yet challenging to deal with from here).
Thank you.
Posted by J Deadmarsh | August 31, 2017, 4:26 amThere is no specified time-frame in which trust information must be given. Filing court proceedings can promote the provision of information. Where court proceedings are required to be filed to request trust information, the beneficiaries can seek their costs from the trustees. See https://mattersoftrust.co.nz/2013/09/08/costs-award-for-failing-to-provide-information/ and Brownlee v McCaslin [2011] NZHC 2102. We recommend that you seek legal advice. We also draw your attention to the proposed new disclosure obligations in the Trusts Bill. See https://mattersoftrust.co.nz/2017/08/02/trusts-bill-released-1-august-2017/
Posted by vickiammundsen | August 31, 2017, 10:16 amThank you for your reply, Vicki. Your responses have been helpful.
In regards to seeking legal advice, where do I start? How do I choose a solicitor/barrister?
Our situation will require applying to the courts to extract trust information from the sole trustee we have requested, as he is refusing to disclose any information.
Posted by J Deadmarsh | September 2, 2017, 4:01 amYou might want to consider a law firm that specialises in trust law. These include Vicki Ammundsen Trust Law (vicki@vatl.nz), TGT Legal and Patterson Hopkins.
Posted by vickiammundsen | September 2, 2017, 2:22 pmHi, in September of 2016 my Aunty became an Administrator of my Grandmothers land which is held in General not Maori. Over this past year, we have had no connect with her, as she does not want to communicate with us. My father and two aunties where married to her respective brothers and sister, so I understand that they are beneficiaries due to being the legal spouses. My question is, how can my father and Aunties ensure a sale of their shares the land that the all do not want, when my Aunty remains the Administrator?
Posted by Belinda | October 5, 2017, 9:24 pmThank you for your question. The answer to this requires a careful consideration of the facts. Legal advice is recommended.
Posted by vickiammundsen | October 9, 2017, 9:58 pmHi I am just wondering if it is illegal to past on charitable trust bank information with out there permission.
Posted by Greg Coleman | October 11, 2017, 7:50 pmSome more information would be helpful.
Posted by vickiammundsen | October 12, 2017, 5:05 pmMy father-in-law married but no kids from he’s wife & now he’s & wife go to lawyer to do will with age 89 & put he’s wife on trustee & her brother . So my question is can he’s kids argue with the will ?
Posted by Berlina | October 17, 2017, 3:36 amIt is unclear from your enquiry as to whether the assets are held in a trust or by your father personally. If the assets are owned personally, your father’s children have the ability to challenge the will (after your father’s death) under the Family Proceedings Act – if there has been a breach of moral duties owed by your father.
Posted by vickiammundsen | October 18, 2017, 11:07 pmHi there, my dad set up his property from before his marriage into a trust with him and my stepmother as settlors and trustees to benefit myself and my brother and two step brothers. Our father passed away nearly five years ago and he was taken off the trust and replaced by my step mother’s brother as a trustee, but not a settlor. Not long after Dad died my stepmother remarried and moved in with the new husband, hence renting out the trust homes (two on the property). She gets a pension, plus the money from the trust and doesn’t want to sell as she will lose the benefit of the rental money, however my brother and I feel that as everyone seems to have moved on and none of us talk to each other and the only person benefiting from what was originally my fathers house is her and that we just want to wind everything up and get what we feel is our inheritance. What legal rights would her new husband and his five children have on the trust and is there anyway we can force her hand to sell and dissolve the trust. Appreciate your help
Posted by Mary | October 17, 2017, 11:40 amThe starting point might be to seek the removal of the current trustees and the appointment of an independent trustee or trustees. Legal advice is recommended.
Posted by vickiammundsen | October 18, 2017, 11:05 pmTrust: two of my siblings are both current trustees, as well as executors & beneficiaries of my mother’s will. The Trust also owns a half-share in real property with one of those same trustees, who also resides there. The Trust is now in the process of being wound up as a result of my mother’s death. In order to do this, the real property must be sold (or a mortgage obtained by the other half-share holder/beneficiary) for the Trust’s half-share to be distributed among the beneficiaries. My concern centers around the potential for a conflict of interest with regard to the real properties other half-share owner, who is also a trustee, & an executor of my mother’s estate. Just to complicate matters I also reside overseas. Any help or suggestions appreciated!
Posted by Mike | October 19, 2017, 10:31 amThank you for your question. The answer to this requires a careful consideration of the facts. Legal advice is recommended.
Posted by vickiammundsen | October 19, 2017, 10:34 amForgot to add that the half-share owner/trustee/executor is also a beneficiary of the Trust’s half-share.
Posted by Mike | October 19, 2017, 10:34 amI hold a declaration of trust of my late farther to whom I am executor. The trust says to devise the assets equally among his five children. One child has asked for their share to be made payable to his daughter. Can I legally do this request.
Posted by Carole lee | October 22, 2017, 1:44 amIt is recommended that you seek advice in the jurisdiction in which the trust is being administered.
Posted by vickiammundsen | October 22, 2017, 11:03 amHi, I’ve a question concerning a family trust: I’ve declared bankruptcy owing to a student loan that grew and grew since the 90’s (thanks to daily compounding interest) and after I left for Australia to find work. Its possible that I may receive an inheritance from the trust within the 3 years of my bankruptcy… I’ve been told that the IRD can take all of it (even if the amount inherited it is more than the amount owed at the time of bankruptcy), and that even after I’m discharged they can still take it (assuming that the death is after being discharged). Is this a load of bull or does the IRD do this? I find it hard to believe that the IRD could take more than what was owed, but then they make the rules.
Posted by Granville | October 31, 2017, 4:27 pmIt is recommended that you discus this with your case manager. The trustees may also wish to take advice regarding whether a distribution must be made during your bankruptcy. Regard should be had to the terms of the trust.
Posted by vickiammundsen | October 31, 2017, 6:18 pmHi, if you recently learn, and have proof, that you’re a beneficiary of a trust, and you want to request more information about it… do the settlors and trustees get notified that you’ve requested to see the trust? If they do, and they find out – can they quickly change the trust to exclude you as a beneficiary (i.e. can they quickly change beneficiaries)?
Posted by Jacob | November 1, 2017, 12:53 pmA trustee will necessarily be aware of a request for information as the trustee has the discretion (subject to the terms of the trust deed) as to whether or not trust information is provided. See Erceg v Erceg. https://mattersoftrust.co.nz/2017/03/08/erceg-appeal-dismissed-exceptional-circumstances-not-to-disclose/. Whether or not a beneficiary can be removed depends on the terms of the trust. However, if steps are taken to remove a beneficiary to avoid providing information it would be appropriate to consider whether this is a proper exercise of trustee powers and powers of appointment and removal. See McLaren v McLaren, https://mattersoftrust.co.nz/2017/03/05/a-sorry-tale/.
Legal advice is recommended.
Posted by vickiammundsen | January 21, 2018, 11:49 amCan a professional trustee have a meeting with one of the discretionary beneficiaries and give them a copy of the trust deed without even informing/consulting with the co-trustee? The co-trustee is also the surviving settlor and a discretionary beneficiary.
Posted by Julian | November 1, 2017, 2:09 pmThe provision of trust information is the exercise of a discretion by the trustees. See Erceg v Erceg. Legal advice is recommended to consider this further.
Posted by vickiammundsen | November 1, 2017, 3:51 pmMy friend was disenherited by her mother and was no told that she will receive $10,000 and thats if unless she contest the will. Well her exhusband and her son have all but cleaned the estate out plus the lawyer is the best friend if the personal representative. Knows of these thefts. My friend received a paper called RECEIPT AND RELEASE, SHOULD
Posted by Cathy Rieker | November 3, 2017, 7:03 pmLegal advice is recommended
Posted by vickiammundsen | November 3, 2017, 7:15 pmI am the beneficiary of a discretionary trust. Upon trust, the deed stated to divide it into three equal parts to be held upon the following trust. To be invested the same until the date of death ect,
Are they entitled to manage the investments as a whole and then allocate the gains with discretion across the three trusts, or is the discretion applicable only from within the separate equal parts? My concern is the other parts have smaller portion of their parts (reduced shared as a result of buying property) yet they are still benefiting from the larger gains made from the larger share portfolio.
Also if the deed states, invest the same until the date of death, are they allowed to change assets to buy property or for other investments?
Posted by Sam | December 1, 2017, 1:39 pmWe recommend that you seek legal advice from a person who is able to review the trust deed.
Posted by vickiammundsen | December 9, 2017, 4:40 pmCan you kindly provide a case law citation regarding the Trustees obligation to confirm an individual’s status as a discretionary or distribution trust beneficiary when the individual requests this? Thank you!
Posted by Erika | December 9, 2017, 4:25 amThere is a general expectation that basic trust information should be disclosed to a beneficiary. However, this is an exercise of trustee discretion that may be determined on a case by case basis. See Erceg v Erceg [2017] NZSC 28.
Posted by vickiammundsen | December 9, 2017, 4:49 pmThank you
Posted by Erika | December 12, 2017, 10:59 amI see various opinion pieces regarding the new Trust legislation indicating that the standards of trustee governance and performance will be held to that measured against a professional in the relevant field, be that investment, or the trustee aspect itself.
What is your view of the ability of beneficiaries to have that enforced.
Currently dealing with a family trust where the approach of the trustees with regard to requested information, is to stonewall, delay, and ignore particularly around accuracy of financial information and questions that call into account trustee actions and understanding of their duties
Posted by Joyce | December 11, 2017, 8:12 amUntil the Trusts Bill is passed, the final form of the legislation will not be known. However, regarding the present position regarding provision of information see Erceg v Erceg. https://mattersoftrust.co.nz/2017/03/08/erceg-appeal-dismissed-exceptional-circumstances-not-to-disclose/. As a general observation where trustees will not respond to information requests the appropriate course of action may be to see the assistance of the court regarding either the provision of the information requested. Where trustees delay in providing information and court assistance is required, the question of costs becomes a live issue.
Legal advice is recommended.
Posted by vickiammundsen | January 21, 2018, 11:56 amMy father has decided to transfer his home to a trust to keep me from getting anything, I am 1 of 5 children and was estranged from my father due to physical abuse on my brother as I did not approve of his actions. I feel this is almost fraudulent and the trust has purposely been set up to keep me out. Is this something I can challenge he passed a week ago.
Posted by Dylan | January 15, 2018, 10:01 pmYou may wish to consider whether any fiduciary obligations owed to you have been breached. See http://www.nzlii.org/nz/cases/NZHC/2017/2596.html. Legal advice is recommended.
Posted by vickiammundsen | January 15, 2018, 10:16 pmJust wondering if there are 3 trustees which are siblings and also 2 lawyers as well as trustees for the trust. If for instance, 2 of the siblings would like to sell their deceased fathers property and the other sibling doesn’t want to, what happens…the deceased fathers will said if their is arguing amongst the siblings it is to be sold and is well as the deed of the trust says majority over minority…I understand the lawyers have to be fair but what happens in that situation
Posted by Jayde | January 21, 2018, 10:43 pmMy grandma passed away in 2012 and left atleast 5 properties and a large amount of cash to my father (her only son) in a trust fund. My 3 brothers and myself we’re told by our grandma that we would get a % from all properties and a portion of the money when we turn 25, we could access it earlier if we wanted to use it for a house deposit, education or to start a family. I turn 29 in a few days and have yet to see anything from the trust and when myself and other family members have asked to see it over the years he flat out refuses, even threatening that anyone who wants to see it or take legal action will be taken off the trust and receive nothing. My dad in this time has bought a mansion, a $200,000+ car, several trips around the world abd doesn’t pay child support for my younger brother even though he is obliged to. A few days ago he said he admitted he had been living on the money from the trust that was meant to go to me and my brothers and asked if we could sign our share over to him so he can pay off his $750,000+ mortgage and move to the United States. It seems at this point the only way forward would be to take legal action against my father but my brothers don’t want to as they don’t want to upset my dad and still think he will give them something in return for signing it over to him. For a bit of insight; my father doesn’t refer to it as a trust but as “his dead mums money that he earned” so this is the kind of person I’m dealing with.
Posted by Alex | February 11, 2018, 1:12 pmWe recommend that you seek legal advice in the jurisdiction where the trust is managed regarding obtaining trust accounts and the options are available for protecting the assets of the trust for the benefit of the beneficiaries.
Posted by vickiammundsen | February 12, 2018, 8:34 pmYou need to take legal action, your only young but when you start your own family one day you will be wanting to create a future for your family. An opportunity to create equality and a secure future for your family is probably what your grandmother may have wanted for you. There will be not money left before long especially if your father does not have the income to support his new lifestyle. Best wishes.
Posted by Bridget Robinson | February 13, 2018, 7:35 amHi, I see people are getting answers in 2018, so I have a question too please. My sister and myself are beneficiaries to a trust set up by my Great Uncle in 1996. His sister, my Grandmother, was the primary beneficiary and passed away in 2015. My mother is now the primary beneficiary according to the Deed, but we are also discretionary beneficiaries and to be the final beneficiaries. It is a discretionary Trust run by one of the commonly known big Trustees. When my Great Uncle passed away his Memorandum of Wishes to the Deed, added 2002, were respected and for a few years (2004-2007) annuities were given to my Grandmother ($20k), mother, sister and myself ($10k each), as stipulated. But once the GFC struck our annuities stopped (except my Grandmother probably still got money as the primary beneficiary). I know wishes are not binding, but it never started up again. My mother was angry when my sister enquired at the time. I’m giving this back-story to show the Trust did act on the wishes which named us as beneficiaries. Jump to 2015 and now I’ve also fallen-out with my mother. For the last three years we’ve had no contact. This year my sister and I thought we should enquire about the trust and were curious/concerned what she might be doing as a primary beneficiary. So my mother has drawn down nearly $1million from the trust in the form of a ‘loan’ (I presume it was within the last three years, but perhaps she has accessed it for longer). This is quite astounding to us. The new Trustee manager was not aware of the wishes (annuities) and the statements for the 2016-2017 tax year shows the annuity total ($30k) is actually listed under my mother’s name only but not being acted upon This financial year at least) because there isn’t enough to cover it from the depleted earnings. What could have been a healthy trust, benefiting all of us through annuities and small borrowings, is basically halved in terms of true investment capability (i.e. the $1million ‘debt’ will never be called on, right?). So now we need to think on what to do. We could ask why such a large amount was allowed to be taken out. We may need to go to court to see what that ‘loan’ was used for. Future generations will be missing out if they don’t pay the ‘loan’ back. Also, it could happen again. My mother may be acting maliciously against my sister and myself by ‘bleeding’ the trust.
Posted by walterandbruges | February 13, 2018, 8:29 pmJurisdiction specific advice is recommended. However, as a general observation, the starting point might be an application to the court to review the Trustee’s decisions and actions. See for example Trustee Act 1956, s 68
Posted by vickiammundsen | February 13, 2018, 10:13 pmThank-you for your reply. I also wondered if Section 13B would have some bearing in terms imprudence by taking out so much. In general, what is the power balance between the Trustee Act 1956 (under revision, so changes are afoot) and any specific Trust Deeds. Does the Act have an over-arching influence in cases. The Deeds can read very open-ended, as if the Trustees can do whatever they want, but the Act (e.g. 13B – 13G) seems to direct what should be done. Is the Act a benchmark? I know Wishes can be ignored as not legally binding. It seems to me the Act is, or should be used, as a backstop to Trustees wielding their power with indiscretion.
Posted by walterandbruges | February 14, 2018, 6:57 pmThat would depend on whether or not there was a contrary intention specified in the Trust Deed. The provisions of the Trustee Act that your refer to relate to Investment powers. As a general observation the Trustee Act provides limited guidance with respect to how discretion is to be exercised in the context of the exercise of dispositive powers – case law (or common law) is more instructive in this regard. See for example Clement v Lucas. Also note that s 7 of the Trustee Act, which related to the exercise of discretion was repealed in 1988
Posted by vickiammundsen | February 14, 2018, 7:21 pmHi Vickie,
I have a question that stems from RPA – any advice is greatly appreciated.
My sisters ex partner is a trustee of his own trust (discretionary I think) and their [ ] girls are beneficiaries. One of the points in the deed mentions maintenance, education and advancement of the beneficiaries, at the trustees discretion.
My question is, under RPA my sister is entitled [ ]. In contrast, the trust has considerable assets. Would it be wise for her to try and come to some arrangement with the trust in consideration of the girls I.e. A house for living … as the standard of living is not currently at the level her and the girls had, and school fees for the entirety of their school lives?
[ ]
She has a fantastic, very expensive lawyer who is very generous with payment options but the bill is climbing quickly. Her ex is dragging his feet for all he’s worth (he has intimated that she can’t afford a lawyer and so will give soon) and we wondered if this is something that could be seriously considered? My sister is also considering creating a trust for the girls to put any funds settled in to if that helps?
Thank you, in advance.
Posted by Jo | February 18, 2018, 5:05 pmThe questions raised by you should be directed by your sister to her lawyer who will be well placed to advise on these matters. The inter-relationship between trusts and relationship property is complicated – and this is one of the reasons for the current review of the relationship property legislation. See IP41 Dividing Relationship Property – Time for Change? Te mātatoha rawa tokorau – Kua eke te wā? http://www.lawcom.govt.nz/our-projects/review-property-relationships-act-1976?id=1454
Posted by vickiammundsen | February 19, 2018, 9:08 amHi
I have been married 8 years and in the same relationship 12 years.
One year after living together the house then owned by him was sold to his mother and then rented to us. Boat was then put in a inheritance trust owned by his mother but leased to him.
6 years on a new house got built and transferred into inheritance trust owned by his mother but he and his children are the beneficiaries and he is the beneficiary and the trustee. I pay equal share of rent etc each week and would like to know if I have any rights as I do not own a home of my own if anything happens.
Posted by Kerry Smith | February 27, 2018, 3:47 pmThank you for your e-mail. There are a range of remedies that can be explored when a person who may not be a beneficiary has met trust costs and expenses or made advances to a trust that may remain outstanding. Constructive trust remedies should also be explored. Legal advice is recommended.
Posted by vickiammundsen | February 28, 2018, 12:21 amKia ora my name Clive Wallace i have a concern about a trust fund where i am a beneficiary n my brother n my sister is a trustee my concern is :I live in Australia and i got sucsession papers sent to me 2006/7 to sign which i did n i gave to my niece to bring back to New Zealand to give to her mum my sister that succession gave us our dad’s estate few years later my aunty (dad sister )who is a shear holder in the trust said to me why havnt you kids succeeded to dad’s estate or shears coz they get dividends annually which one the trust investment is in forestry central north island thats one of there biggest investments goin now n some how i found my dad’s name on Maori land department i clicked on his name n it came up estate unsucceded it also had how much money was in his account then i was thinking after being dead 30 plus years he would have more than $200 in his account n i no he was a major shear holder in the trust i dont no how the process works for trust fund to look after there beneficiary but im thinking sumthing not right my sister is a trustee i want to findout if there is any discrepancies goin on with our dividends that we have missed out on my dad’s name is Clive Joshua Wallace
Sisters name is kelly wairemana Robinson
Trust name is chadwickfamilytrust please if could help in anyway would great to no if uts worth it chasing up thank you
6 ludong street nerang gold coast
Australia 0414524426
Posted by Clive Wallace | March 1, 2018, 2:34 pmHello Clive
From a quick check I noted that you father had interests in about 50 blocks in the Central North Island held through a number of Ahu Whenua trusts and which, interestingly, do still appear to be in his name (rather than passing to his successors as you obviously expected to happen). While the operation of Ahu Whenua trusts and the process of registration of interests through the Maori Land Court is specialised and not quite like other trusts that we deal with (for example the process of approving trustee appointments with the Court), at first glance what you are asking about doesn’t seem right – which is obviously why you have asked. The impression is that the succession documents may not have been filed with the Maori Land Court so that any payments/distributions from the land interests have continued to go to your father’s account.
I suggest that you take the following steps (and to avoid cost you should be able to do these yourself):
1. Contact the Maori Land Court for the Whanganui-Aotea District – which is the District where most of the blocks are situated. The others are all in Waiariki, the Court based in Rotorua. You can get details and serach for land blocks through the maorilandcourt.govt.nz website. Contact details are:
Whanganui – Aotea District
Judge: Judge Layne Harvey
Registrar: Caroline Green
Street address:
Ingestre House
74 Ingestre Street
Whanganui
Postal address:
PX10207
Whanganui
Phone: 06 349 0770
Fax: 06 349 0771
Email: mlcaotea@justice.govt.nz
To make the process simpler you should start by choosing just 1 or 2 blocks from those listed under your father’s name. Then you can ask the Court (a) to confirm that the succession documents have not been filed and (b) get contact details for the Ahu Whenua Trust for the particular block (many of the Trusts, such as the Lake Rotoaira Forest Trust, control multiple blocks so choosing a block controlled by a trust with several blocks might make things easier although you should remember that many blocks have thousands of individual owners/shareholders).
Then contact the Trust to confirm that it has not received the succession documents, whether it has notice that the shareholding relates to a whanau trust (for your father’s estate) and also to confirm where it is sending all communications and payments. You might also give the Trust notice that you may have a claim over the interest held in your father’s name, in case that will put a hold on further payments being made.
However, if payments have been made over the 30 years since your father died, or at least since you signed the succession documents, it may be that your only claim in respect of dividends you have not received will be against your sister personally or anyone else who controls the bank accounts dividends have been paid to.
Posted by vickiammundsen | March 7, 2018, 1:22 pmMy brother passed away recently , leaving a trust to my two siblings & leaving me out because of a minor rift . My two siblings want change it to a three way split , can they by law in N.C. ?
Posted by Nancy McLain | March 13, 2018, 10:33 amThank you for your question. Please note that the information given relates to the current legal position in New Zealand.
Legal advice should be sought regarding the applicability of this to other jurisdictions.
Posted by vickiammundsen | March 13, 2018, 8:55 pmMy daughter is the sole beneficiary of a trust set up by her Grandfather (deceased 14years ago). Vested date 2082. I am a trustee along with a lawyer. My daughter turns 18 this year. As she is the sole beneficiary can we access the majority of these funds prior to 2082 (as she would be 82 then!!) We are wanting to have the majority of funds to buy a house for her to use at University but the funds now no longer enable to purchase a house outright. As a trustee, what rights do I have if the lawyer refuses to agree? Can the trust money be transferred if we decided to set up a trust for my daughter? Placing the money in house would be what her Grandfather would have wanted her to do but is not stated in the deed, there is also a Memorandum of Wishes – do I as a trustee have the right to ask to see them? DO they have influence over how the trust is run? Money allocated? Thank you for your help
Posted by Pippa | March 23, 2018, 10:41 pmThe memorandum of wishes is generally expressed as a letter to the trustees advising the settlor’s wishes. Accordingly, this is normally a document that trustees are entitled to see. We recommend legal advice. The legal adviser will need to see the trust deed and the memorandum of wishes to advise. If there are no other beneficiaries we draw your attention to the rule in Saunders v Vautier.
Posted by vickiammundsen | March 25, 2018, 2:52 pmI’m a beneficiary of my parents family trust. If I choose to ask the trusts lawyer for details & financial information, instead of the trustee (as I do not trust her) who has to pay for it?
Posted by Chris | May 3, 2018, 8:39 pmCan a settlor name his/her Estate to be a beneficiary or the sole beneficiary of a trust?
Posted by Ruth Cleaver | May 9, 2018, 1:23 pmIf there is no beneficiary to enforce the trust, as will be the case where the living settlor’s estate (which must necessarily be contingent on the settlor’s death) is the beneficiary we suggest that it will be necessary to consider whether the requirement for certainty as to beneficiary is met.
Posted by vickiammundsen | May 11, 2018, 1:06 amWhat is the situation regarding the Minutes of Trustee meetings?
Are they ‘discoverable?”
If so, under what circumstances?
E.g. A beneficiary; Court Order; demand from the CIR; the Settlor.
Posted by Simon | June 14, 2018, 2:55 pmBy way of general comment if the request is from a beneficiary, disclosure is at the discretion of the trustees. See Erceg v Erceg [2017] NZSC 28. If the disclosure request is pursuant to a Court Order the trustees will be required to act in accordance with the Court Order unless the decision making the order is the subject of appeal. With respect to a third party or settlor request – these are not parties ordinarily entitled to trust documents in the first instance. However, it would be necessary to consider the circumstances of the request.
Posted by vickiammundsen | June 23, 2018, 8:04 pmMinutes of the trust weren’t made available. Primary beneficiary whom transferred capital had memorandum of wishes within will, will got contested and father died intestate. Have copy of trust dead and some of the financials and a letter of a major an asset owned by the trust that wasn’t accounted for.
The trustees cleaned out the trust and gave those monies to an other beneficiary and wound the trust up. Primary beneficiary that the trust dead had said were to get equal shares when wound up wasn’t done that way, it was like the other beneficiary was also added as a primary beneficiary.
Posted by Kane Wayne | June 23, 2018, 9:44 pmLegal advice is recommended.
Posted by vickiammundsen | June 24, 2018, 12:40 pmIf an appointed trustee has claimed bankruptcy of his own business what are the ramifications regarding this?
Posted by Ritea Hira | June 18, 2018, 8:17 pmWhether a bankrupt trustee can remain a trustee depends on the terms of the trust instrument (although if the Trusts Bill is passed in current form a bankrupt trustee will not be qualified to be a trustee in New Zealand). That said, generally a bankrupt trustee would be considered unsuitable as a trustee. However, if the trustee is say a shareholder in a company that is liquidated, that would not normally by itself be grounds for the shareholder’s removal as a trustee.
Posted by vickiammundsen | June 23, 2018, 8:08 pmCan a trustee make payments from a trust to a secondary beneficiary while not making payments to primary beneficiaries?
Posted by Paul Howard | August 25, 2018, 1:29 pmTo answer this question it is necessary to review the terms of the deed, and to consider the directions to the trustees in any memoranda of wishes.
Posted by vickiammundsen | August 25, 2018, 5:09 pmOur family has established a trust for inherited assets. The named beneficiaries are the children of our grandmother, and where one child has passed away (our father), that child’s children (my siblings). We may have another possible sibling and are looking to have a DNA test to determine that. If this person is indeed a sibling, do they automatically get included as a beneficiary of the Trust? Or would they need to be added in as a beneficiary? Are we legally required or obligated to include them?
Posted by Helen | September 18, 2018, 10:17 amThank you for your enquiry. The starting point will be to look at the terms of the trust deed and how beneficiaries are defined. Depending on the relevant jurisdiction there may be relevant Status of Children legislation that also requires consideration. Legal advice is recommended.
Posted by vickiammundsen | September 18, 2018, 10:49 amMy parents moved from Christchurch post earthquakes, there are 3 daughters, my parents brought the daughter who moved with them a home with a mortgage my sister now wants to sell the home my mother is deceased. Previous to this their Christchurch home was split 3 ways I think 2 of us have been cut out. My father may move back to live with me in Christchurch my sister up North wants to sell the house and move to Auckland and has told my father he can’t come. My father won’t discuss if I and my other sister are in the Trust as too embarrassed. We are estranged from the sister up North how do I find out if she’s ripping my 83 year old father off, please help.
Posted by Jennie Gates | October 6, 2018, 12:10 pmThank you for your question. We recommend that you appoint a lawyer to request a copy of the trust deed and trust information so that you can be properly advised.
Posted by vickiammundsen | October 6, 2018, 2:23 pmI know the difference between a discretionary beneficiary trustee and a normal beneficiary but what power does a primary beneficiary have over a secondary beneficiary trustee if the trustee
Posted by Paul roach | October 10, 2018, 10:50 amThis depends on the terms of the trust. Generally, but not always, trustees are empowered to favour the primary beneficiaries ahead of secondary beneficiaries for the life of the trust. However, this is not always the case – each trust deed should be read carefully.
Posted by vickiammundsen | October 15, 2018, 11:16 pmCAN I stop a trust being set up for me against my will. I’m one of three grown children and I’m being screwed. I’m the only one being set up for this .no reasons given in the will .and their are no reasons
Posted by David sigglekow | December 1, 2018, 3:20 amIt will be necessary to review the terms of the will to answer this question. Legal advice is recommended.
Posted by vickiammundsen | December 2, 2018, 1:07 pmCan you pay children (NZ residents) a certain amount tax free from an Australian testamentary trust? Thank you
Posted by Jenny | December 9, 2018, 10:06 pmWe recommend that you seek advice in Australia with respect to this question.
Posted by vickiammundsen | December 11, 2018, 10:49 pmIf a beneficiary is given a gift of funds from the trust, do the funds have to be returned to the trust before the trust can be dissolved.
Posted by Sharon Gray | December 14, 2018, 5:13 pmSubject to the terms of the trust, and the relevant jurisdiction, funds transferred to a beneficiary are generally either by way of income or capital distribution or a loan. Distributions of income or capital mean that the income or capital is the property of the beneficiary following the distribution. However, if a loan is made, this can be required to be repaid and could (subject to the terms of the loan) be required to be re-paid before a trust is wound up. Legal and accounting advice is recommended.
Posted by vickiammundsen | December 15, 2018, 9:46 pmMy brother and I brought my parents property in 2010 as they were facing financial difficulties. We formed a family trust and as far as I knew my brother and I were the trustees. My family, Mum, Dad and brother are now telling me I do not own anything and I have nowhere to live. There are 2 houses on the property and I have 8 children ranging from 2yrs old through to 25yrs. How do I find out my entitlements, can you please help me. I don’t know where to go or what to do.
Posted by Georgina Whiu | January 22, 2019, 9:37 pmIn my mother’s will she left everything to my brother and myself.The property that my mother and myself were living in was sold and a new property was purchased with a mortgage that my mother and myself had to pay for 50/50 when my mother passed away I ended up with sole title and the full mortgage to pay.if the property now sells what percentage of the property is my brother entitled to if any?
Posted by Peter | February 4, 2019, 11:49 amWe recommend that you seek legal advice from the estate’s lawyer.
Posted by vickiammundsen | February 4, 2019, 11:05 pmWe have a familty trust of which the settlors were my mother and step father. My mother passed leaving stepfather as a trustee, and discretionary beneficiary. There are two other trustees. The Trust half owns the marital property with the other half left to stepfather. The children of my mother (including myself) are discretionary and final beneficiaries.
It has been discovered that the Stepfather has been taking distributions and earnings from the trust without resolutions with the agreement of other trustees – quite a sum of money over time. When questioned by the other trustees he said that they should just right them off retrospectively as distributions to himself as he does not have receipts.
My questions are:-
a) Is he in breach of his duties and does he have to repay the monies?
b) Are all Trustees responsible for return of the monies and writing off the distributions retrospectively not ethical?
b) Can he be removed from the Trust bearing in mind he is a Settlor and a Trustee?
Thanks
Posted by Jane | February 5, 2019, 1:41 pmThank you for your question. We recommend that you seek legal advice. However, by way of general observation, being a settlor and trustee of a trust is not a bar to removal. We also note that all of the trustees owe fiduciary obligations to the beneficiaries and have obligations as trustees.
Posted by vickiammundsen | February 7, 2019, 11:09 pmMy trustee changed his offices and told me that I don’t have any rights to ask him about the trust’s accounts, he doesn’t even pay my schoolfees nor send me my allowance. I don’t even know what’s happening with my assets.
Posted by Boipelo | February 13, 2019, 12:20 pmWe refer you to the Supreme Court decision in Erceg v Erceg [2017] NZSC 28. Legal advice is recommended.
Posted by vickiammundsen | February 13, 2019, 9:26 pmTwo sisters – Trustees of their collective families Trust. They have ‘fallen out.’ the management of the Trust’s assets is suffering, as a consequence. The Trust Deed has a provision for the removal of a Trustee: “If a Principal Family Member is unable or unwilling to act, the Principal Family Member’s powers of appointment and removal of Trustees shall be exercisable.”
Is that clause adequate grounds for one sister to remove the other and appoint a replacement Trustee?
Posted by Simon | February 14, 2019, 9:56 amThe starting point will be to review the deed to determine who the Principal Family Members are.
Posted by vickiammundsen | February 14, 2019, 10:53 pmThe trust that I am a beneficiary in has only two trustees currently but the Memorandum of Wishes says that there must be a minimum of three at all times. Are their decisions legal while there is only two trustees.
Posted by Mike Willis | March 7, 2019, 8:19 pmA memorandum of wishes represents the settlor’s wishes. The terms of the trust (as set out in the trust deed) will provide the minimum number of trustees (if there is one).
Posted by vickiammundsen | March 7, 2019, 9:39 pmMy brother formed a Family Trust back in 1997 as the ‘Settlor’ but has since passed away overseas. The remaining family only have the original Trust Deed.
No Deeds of Variation, Trustee info/minutes or property agreements can be located. How do we continue to operate this Trust legally?
Posted by Donna | March 25, 2019, 2:12 pmYou raise a number of issues. It is suggested that the starting point is to establish whether any property was ever bequeathed or transferred to this trust. With this information, the trustees’ obligations will be clearer. If you are unable to establish this, we recommend legal advice as this is not always straightforward. How this can be determined will depend in part on the jurisdiction that the trust was settled in, and any jurisdiction subsequently adopted – for example through migration of trustees. Once the position of the Trust is established, advice regarding trustee duties and beneficiary rights is recommended.
Posted by vickiammundsen | March 25, 2019, 7:20 pmKia ora vicki, how do I go about trustees who don’t adhere to trustees duties or the trust deed on Maori land, as I am a beneficiary. Isthere an application form I can apply to the maoriland court for this if so what are my processes.
Thank you
Posted by Bron | August 9, 2019, 5:51 pmLegal advice is recommended as this is a specialist area.
Posted by vickiammundsen | August 22, 2019, 11:32 pmCan you resettle a testamentary trust?
Posted by Will | October 17, 2019, 9:55 amThe terms of testamentary trust are generally governed by the will from which the trust has arisen. Legal advice is recommended.
Posted by vickiammundsen | October 28, 2019, 4:42 pmHi can a chairman of a ahu whenua trust decline me of minutes from meetings held.As a beneficial owner I have requested minutes over and over and finally got an answer which was,I shall recieve these in due course.Maybe at the next AGM
Posted by Bronwyn | November 10, 2019, 7:08 pmThank you for your e-mail. Trustee minutes are category 2 document, as assessed by the Supreme Court in Erceg v Erceg see [73] at (b) Category 2: Item 2 (minutes and resolutions). We see this category as similar to Category 1, save for the fact that disclosure without redactions may reveal the reasons of the trustees for the dispositions made by them. Legal advice is recommended as the context of any enquiry is a relevant consderation.
Posted by vickiammundsen | November 10, 2019, 7:21 pmGiven the forth-coming legislative changes, what is your opinion on the changes and therefore the utility of discretionary Trusts (trading or passive), after the amended laws come into effect?
Posted by Simon | November 11, 2019, 2:22 pmThe Trusts Act 2019 makes trustee obligations clearer and introduces a new presumption regarding beneficiary notification. This will not suit all settlors. However, there remains an important place for trusts that are settled for relevant purposes.
Posted by vickiammundsen | November 13, 2019, 12:14 amHi. I am both a trustee and beneficiary in a discretionary family trust set up by my Father, who is no longer alive. The only asset is a bach. There are 3 other trustees.
My 2 siblings are named together with me as beneficiaries and the 8 grandchildren also beneficiaries but not individually named. I believe my siblings and I may be known as Primary Beneficiaries .
The trustees are considering selling the bach , winding up the trust and the funds distributed. Should my siblings and I share the funds equally 1/3 each or should the 8 children be included so that we share 1/11 th each.
Thank you
Posted by Virginia Pretty | December 22, 2019, 9:00 pmThe trustees must act in accordance with the terms of the Trust. Legal advice is recommended.
Posted by vickiammundsen | April 13, 2020, 10:02 pmMy father has land with rentable houses on it. This property is in trust and on his death, myself and my children are beneficiaries.
Currently one of my children is living in one of the rentals but being charged full market rent. I believe that as a beneficiary he should be entitled to ,at least, a very reduced rent (he is young and struggling financially).
What would you say about this?
Posted by Lucas | December 26, 2019, 3:37 pmWhether or how trustees benefit any particular beneficiary depends on the terms of the trust and the exercise of the trustee’s discretion (where a trust is discretionary). Legal advice is recommended.
Posted by vickiammundsen | December 27, 2019, 11:59 amIn such a situation as you describe, concession rental figures carry some risks from:.
* other discretionary beneficiaries;
* the IRD.
Having full regard for Vicki’s comments, the Trustees might consider a ‘special’ beneficiary distribution to your child.The net affect could be construed as a reduced rental but (by way of a distribution) the risks are lessened. Something you could suggest to the Trustees, perhaps?
Posted by Simon | December 27, 2019, 1:48 pmIn some situations, the trustees pay for children school fees (minors) and then accountants allocate these costs as a loan between the trust and the beneficiary (only for later income distributions to offset the loan).
Are there any limits on what the trustees can spend (on behalf of the minor beneficiary). In some cases I don’t imagine the beneficiary would even know how much the school fees were. The beneficiary is generally creating a liability that they likely don’t know about, nor have any control over (as they are a child, and the parents and deciding what school to send them to).
Is this allowed for only private school fees, or any school fees. Do the costs need to be above normal living costs for children? Is there any further commentary on this?
Posted by Nigel Barnes | January 31, 2020, 7:09 amHi, my parent family estate has recently been changed. I am one off three siblings and my brother and sister have been informed of these changes. I have been left out , but have found that my siblings have received the family business which goes to my sister equity of 9 million and the my brother has received well over a million dollars in cash. I cannot get a straight answer wether I am a beneficiary of the trust. Also can I take any legal action before my parents are deceased? Also when disputing a will, is it only based on content of what’s left in the will or can I contest from the unfair distribution of inheritance that has happened now as well. I am normal and have no reason for them to leave me out I am the youngest sibling 40 years old also The family business is a farm . Please can you help in anyway
Thankyou
Posted by Bridget Robinson | February 14, 2020, 11:55 amLegal advice is recommended.
Posted by vickiammundsen | February 15, 2020, 8:44 pmHi Vicky,
Can you please explain what a Declaration of Trust is under NZ Law in relation to Property.
Thanks
Posted by Phil | February 16, 2020, 2:52 pmA declaration of trust in respect of real property must be in writing to meet the requirements of the Property Law Acr 2007. Trust deeds commonly contain a declaration of trust over the initial trust settlement. This is usually a nominal sum. However, this is in large part an historic practice brought about due to subsequently repealed estate and gift duty law.
Posted by vickiammundsen | February 16, 2020, 3:54 pmIf a trust allocates beneficiary income for the purpose of having the income taxed at the individuals marginal rate, instead of the flat trust rate of 33% – does the beneficiary have a right to demand this in cash?
Posted by Bede | March 29, 2020, 5:58 pmIncome allocated to a beneficiary is the property of the beneficiary.
See further at https://mattersoftrust.co.nz/2015/09/30/is-it-tax-avoidance-to-distribute-to-the-beneficiary-best-able-to-benefit/
Posted by vickiammundsen | March 29, 2020, 9:42 pmI have a few questions relating to a discretionary beneficiary and rights of a trustee.
1. A discretionary beneficiary has requested from the trustees, a copy of financial accounts, details of the trust’s current assets and liabilities, and details of distributions of capital and income and who they were made to over a certain period of time (previous 12 months).
– What is a “reasonable timeframe” to receive this information?
– Are these documents discretionary in terms of whether the trustees have to provide them or not?
– And if they aren’t discretionary, do the previous cases you have outlined in relation to this information outline the beneficiary’s rights (i.e. review of the Laws of Trust; Schmidt v Rosewood Trust; Foreman v Kingstone; and Breakspear v Ackland)?
2. A trustee has approached the trusts accountant and asked for financial statements directly as they are struggling to obtain them from other trustees. However, the accountant has refused to provide them, and instead told them to get them from another trustee. Can the accountant refust to provide them?
Posted by Mickey | April 24, 2020, 8:39 pmPrior to the Trusts Act 2019 coming into full force and effect the provision of trust information in New Zealand is an exercise of trustee discretion. See the Court of Appeal decision in Erceg v Erceg and the subsequent Supreme Court decision at [62] where the Supreme Court states that:
[62] In the normal run of things, trustees will provide these to close beneficiaries on request or proactively, without the need for a request. If they refuse, a court will be likely to require disclosure unless, to use Potter J’s formulation, there are “exceptional circumstances”. This is the so-called “presumption” of disclosure, noted earlier. We see it more as an expectation that basic trust information will be disclosed to a close beneficiary who wants it. But there may be room for debate about who is a close beneficiary and the request for disclosure may go beyond such basic information. The greater the scope of the request and the remoter the interest of the beneficiary, the more room there will be for argument about the appropriateness of disclosure.
The approach taken by the Supreme Court requires a consideration of disclosure requests that relates to the category of document and a range of factors to guide trustees in the exercise of their discretion. No guidance is given as to an appropriate time-frame. However, as a general observation this might be linked to the range of information requested, the time required to obtain the information and the availability of trustees to make a decision regarding what documents to disclose.
Regarding your second question, the response you refer to appears appropriate.
Legal advice is recommended.
Posted by vickiammundsen | April 26, 2020, 1:47 pmHi Vicki
My mother passed away over 14 years ago and in her will was this:
As soon as possible after my death I EMPOWER my trustees in their absolute discretion and upon their unanimous decision to distribute amongst such of my beneficiaries, family and friends as they shall determine such chattels comprising furniture, furnishings, pictures, crockery, linen and other household utensils and items of household use or adornment on an equitable basis provided however that should there be lack of unanimity or any dispute as to such distribution then the items the subject of that dispute shall be sold and the proceeds distributed as part of the residue of my estate as provided elsewhere in this my will. I DIRECT my trustees that as far as possible they are to give effect to any gifts of chattels.
I am having difficulty of having access to items I might like. My brother has purchased the property, but it is unoccupied.
This time seems unacceptable, How long should I have waited, and am I able to take legal action as to obtain access .
I am now 70 yrs old, and my brother 75. Time is running out.
Regards
Trevor
Posted by Trevor | May 3, 2020, 2:00 pmThank you for your enquiry. The answer will depend on where the administration of the estate is at. Delay can result in remedies that are otherwise available being lost. We suggest that in the first instance you approach the executors and trustees of your mother’s estate and if you do not receive a satisfactory result, seek legal advice.
Posted by vickiammundsen | May 3, 2020, 2:08 pmHow can we check If our family trust we had set up some years ago is still valid. This is because we want to put our family homstead which is still under mortgage in mine and my sisters name and to also search for any of our parents Maori land shares into this trust?
Posted by Vickey Philippa Harris | May 25, 2020, 2:35 pmThank you for your enquiry. The starting point is to review the trust deed and related documents to check how long the trust can run for and whether it has been wound up. Legal advice is recommended.
Posted by vickiammundsen | May 25, 2020, 2:39 pmHow can a trustee be replaced
Posted by keith hammond | May 30, 2020, 8:31 amA trustee can be removed by the person with the power to do so in the trust deed (if there is one). If there is no such power the next step is to look at the Trustee Act 1956 (presuming you are inquiry relates to a trust subject to the law of New Zealand) and in the event that the Trustee Act does not address the situation, the assistance of the Court may be required.
Posted by vickiammundsen | May 30, 2020, 1:09 pmI am the sole beneficiary and one of two trustees of a family trust. I do not want to be part of the trust any longer. Is there a way for me to remove myself as the beneficiary and trustee without agreement by all trustees? Or can I initiate the wind up of the trust without agreement by all trustees?
Posted by Sarah | June 23, 2020, 12:32 pmA beneficiary can renounce interests or rights under a New Zealand settled trust. Legal advice is recommended, particularly if the trust you refer to is in a jurisdiction outside of New Zealand.
Posted by vickiammundsen | June 24, 2020, 1:27 amHello,
My mother was placed in a nursing home at the request of a Mental Heath Specialist, & our Mother. When Mother passed our father decided to change our trust which all four children were beneficiaries to his Lawyer and himself!
Is this legally right ? as now we are wiped out of his will and any intentions our Mother requested in her will.
Kind regards
Julie
Posted by Julie Chegwidden | July 8, 2020, 11:52 pmThank you for your e-mail. Legal advice is recommended.
Posted by vickiammundsen | July 13, 2020, 10:17 pmI have a trust that has my sister as the trustee. She is also as the will states to receive the balance of my trust when I die. She also has refused to give me any of my trust, because it’s in her sole discretionary cosent.Wouldnt this be a conflict of interest?She would receive more money because of not giving me any.
Posted by Mike Ogletree | July 9, 2020, 3:43 pmThank you for your e-mail. Legal advice is recommended.
Posted by vickiammundsen | July 13, 2020, 10:15 pmCan a trust vest in its beneficiaries without naming each individual beneficiary? e.g “$100 to all beneficiaries”.
Posted by Colin | July 10, 2020, 12:17 pmThe trustees may be able to make such a resolution if it is clear who the beneficiaries are. However, there will need to be identification of each beneficiary for payment to be made. Legal and / or accounting advice is recommended.
Posted by vickiammundsen | July 12, 2020, 9:55 pmHello,
I am a discretionary beneficiary of my Mum’s Trust, Mum is still alive and the Trust is not getting settled. I am in the process of negotiating a property separation with my ex husband, who is demanding to receive copies of the Trust Deed and the Trust’s Financial Accounts. He is not listed as a beneficiary, only by default “any person who is a spouse of any child of the appointor”. Does he have rights to this information? And, secondly I would not have thought this can form part of the joint property pool?
Posted by Tracey Foy | July 11, 2020, 1:18 pmAny beneficiary can request information. It is an exercise of the trustees’ discretion whether this information is provided. See Erceg v Erceg. Also consider s 182 of the Family Proceedings Act. Legal advice is recommended.
Posted by vickiammundsen | July 12, 2020, 9:45 pmwhat are the differences of rights and duties of beneficiary
Posted by chamika | July 18, 2020, 7:14 pmDiscretionary beneficiaries of New Zealand trusts have a right to be considered, to have their interests protected and to request information. Beneficiaries do not have duties that apply to trustees.
Posted by vickiammundsen | July 20, 2020, 11:07 pmIf the people who my parents left the will with have renonuced and leaving it for myself and brother to handel as trustess as the beneficary is my son 10 years old and gets the house when 25 brother is contesting will said would renonce if I did but I will not as want to meet the wishes of my parents. It has still not gone to probate over a year later. If I have him removed can I as trustee put the house in my name to do renovations and upkeep of the house understanding I have no monetry gain at all.
Posted by Fiona | July 30, 2020, 11:44 amThank you. Legal advice is recommended.
Posted by vickiammundsen | August 1, 2020, 9:16 pmI’m new at this but my mum n dad did not leave a will, but somehow I became the administrator to search for land in my dads name at the time my brother n I gt us a lawyer to do this,which we did my brother passed away 23yrs ago n our lawyer has also passed so where do I go frm here as there were 15 of us siblings then now there only 9 of us left ,.my brother and i were pose 2 set up a trust for ourselves n siblings n whanau can I gt guidance please.
Posted by Hariata Rangiaho | September 2, 2020, 11:32 amThank you for your e-mail. We recommend that you contact a lawyer with experience in Whanau Trusts.
Posted by vickiammundsen | September 3, 2020, 12:33 amCan a trustee , who allowed me to build , stop me and put a tresspass order on yr husband , i’m a trustee and owner of the same property, how much right do you have to build anywhere on the land , even though I called for a meeting , it was nice to get the get go to build , but to get told where by my nephew and niece who are trustees themselves that I was to go where they say , if you’ve already done the deed can they still stop you from moving there , older brother is manager and seems to show favouritism towards them.
Posted by Kathleen Heihei | September 26, 2020, 10:31 amLegal advice is recommended.
Posted by vickiammundsen | September 26, 2020, 10:37 pmCan the trusties remove or beneficiaries due to change of circumstance
Posted by Grahame Thomas | November 12, 2020, 1:19 pmYou will need to review the terms of the trust. Legal advice is recommended.
Posted by vickiammundsen | November 23, 2020, 9:59 pmHello Vicki, i am in a position of extremes, and dont seem to be able to get Any help, or any basic honesty regarding a gruelling on going delima which for 6years has bn refused to addresed by a law firm who have continued to ignore my request of bn paid my inheritance. Nothing to help me, but vicious unsupported unsubstantiated lies, harassment, and bullying. Ive tried every which way, but keep coming up against walls, this whole business has ground me down to a point of absolute helplessness, nobody will advice me, how to get my monies without providing papers of proof, and the people involved? So how does this help me? When i cant even get any assistance with a legal matter that gives the ” Trustees” a right to use thier own unsupported prejudice against me, without any given reason, stalling signing affidavit, requesting unnecessary info, an using my not co operation as reason for closing the claim without my permission, claiming that i wasnt now able to make any more claims against the estate, which i must mention, i have not made any, especially when the only one i had, is ignored /stalled. I desperately nd HELP!! Why are the Laws, which are flouted by the very people who are meant to uphold them. Im appaulled by thier bullying tactics, theyve managed an apparently been able to get away with stealing $50,000.00 and broken numerous laws, and by bullying, an harassment, scare tactics, to get away with the very job they were entrusted to do.
Posted by Bette Szabo | November 16, 2020, 1:10 pmThank you for your e-mail. We appreciate that you are frustrated with what can be a complex legal dynamic. We recommend that you seek advice from a suitable lawyer who is able to hear what you need and assist in a meaningful way.
Posted by vickiammundsen | November 23, 2020, 9:59 pmHello Vicki
My deceased partner and I lived together nearly 15 yrs.” We” built 2 houses together in that time. Un be known to me he had a family trust. Never talked of this. menrandum of wishes 27th June 2007 Kathy allowed to live in home for life or goes into full time care and appointed me also as a discresionary beneficiary. His 2 children also dicresionary beneficiaries. this shows intent to care for me. I paid 2 payments towards mortage plus many other contributions too many to list.I have only just found out that it was illigal to include me? It now leaves me in a position for paying thousands to try to correct something that shouldnt of happen. The will is still in question as children claim the money I paid towards the mortgage comes from the estate and I have been fighting that. I am not living in the property because of my health I live with my daughter. So far I havent recieved a cent while it appears the children have accessed the trust and were asking $2,000 each more interest free loan. The estate was left to me. I live on the pension so dont have a lot of money to fight them .What Im really upset about is finding out about the trust,then only to be told no you arent entitled. How can such a mistake be made and surely there is something I can do without paying thousands
.thanks for listening
Kathy
Posted by kathy Mintrom | December 14, 2020, 6:42 pmThank you for your e-mail Kathy. We appreciate that this is very difficult for you and recommend that you seek legal advice.
Posted by vickiammundsen | December 14, 2020, 7:21 pmHi was wondering if there is a family trust with 2 trustees, and 3 beneficiaries, both trustees and all beneficiaries have signed draft copy confirming distribution of trust. Then both trustees and 2 out 3 beneficiaries have signed deed of indemnity and release of execution. Can the the trust be distributed without the 3rd party?
Posted by Tania | December 24, 2020, 9:08 amLegal advice is recommended so that the trustees can assess the risk of proceeding without a full indemnity.
Posted by vickiammundsen | December 27, 2020, 1:19 pmHi, as trustees of our deceased parent’s trust, my siblings and I think we should remove the “or child or more remote issue” phrase from the discretionary beneficiaries. Otherwise, being an extended family and with the new Trust Act, there’ll be a lot of disclosure requirements, both now and coming up when the younger ones reach 18. That list is just going to keep growing.
That leaves 5 siblings as discretionary trustees. If we want the trust to provide a benefit to one of our “remoter issue”, say, for medical or education reasons, we intend to simply distribute direct to the sibling discretionary beneficiary; they can use it within their family. You can perhaps tell there aren’t arguments here, nor any expected. We treat the trust as our parent’s estate to be distributed generally equitably to all of us, but in a measured and assistive way that we all see benefits in.
My question is, what is the legal position once a discretionary beneficiary dies?
– does their estate, in effect, remain a beneficiary? Is the role of “discretionary beneficiary” in our parents trust, something we should consider in our wills?
– or does someone stop becoming a discretionary beneficiary on their death, for the purposes of subsequent distributions?
– therefore must we then have members of the deceased family added as discretionary beneficiaries in order for them to receive anything?
We would want the next generation – or more – to effectively benefit from the deceased sibling’s share, looking forward.
Posted by Matt P | February 3, 2021, 11:27 pmLegal advice is recommended.
Posted by vickiammundsen | February 4, 2021, 9:03 amHello, A man I had known for only 6 mths said he would help me buy an investment apartment, he did an onsell purchase to me over 2 days, i provided the mortgage against my house and i believe he may (debateable) have put some kind of a deposit down. He created the Trust because he said he wanted to protect the apartment in case someone sued me (as a newly appointed director of his company). So he was the Settlor and I was the Trustee – no beneficiaries. He has lived in the apartment for the last 10 years. Now many years later he wants to sell the apartment. I have never had a copy of the Trust he created himself at home nor a copy of the sale and purchase agreement. All this time i believed I owned an apartment only to find I may only be the “guarantor” and because of the Trust he is the owner. He is it present removing me as the Trustee and replacing me with another. I feel totally ripped off ,,is a Trust the b all and end all?
Posted by kathrynshirley | February 26, 2021, 10:41 amWe recommend that you seek legal advice.
Posted by vickiammundsen | February 27, 2021, 4:40 pmI am my fathers only living child, and I have his only living grandchildren. I have not been apart of his life due to separation with my mother when I was a baby. His family have convinced him to put everything into a trust where I am not a beneficiary nor are my children, he is coming to a point where he is no longer of sound mind and all his siblings, nieces, nephews are just waiting for him to go so they can receive what he has. As his only living child, when he passes am I able to contest the trust? My grandad and a few of his siblings feel my children and I should but is this even possible? He was told to do a trust because they knew I could contest a will, but this I’m not sure of.
Posted by Helen | March 15, 2021, 5:21 amThank you for your e-mail. These are complex fact situations that turn on their own facts. See for example https://mattersoftrust.co.nz/2018/11/30/challenging-estate-boundaries/. Legal advice is recommended.
Posted by vickiammundsen | March 15, 2021, 8:59 amMy father is a beneficiary of his parents estates equally with his brother. His parents stated in their wills my fathers share was to remain in trust to be looked after by his brother and neice. My fathers niece is now the only surviving executor from the wills resulting in her being entrusted to look after my fathers money and home he lives in. I hold my fathers POA. I requested copies of the financial transactions relating to my father approx 3 years ago, some have been supplied and some she refuses to supply. It is clear there is approx 100k that was incorrectly distributed away from my father amongst other questionable transactions. I sought legal advice in my capacity of POA, communication was exchanged between the neice and lawyer. Neice refuses to rectify or provide any updated financial details and stated if legal proceedings are started against her, she will use my father’s money to fund her defence. My legal advice stated as my father nor I have funds to begin litigation against her, there is nothing I can do. Is there anything I can do to hold the neice accountable for her actions and protect my father?
Posted by Sandra | April 21, 2021, 4:56 pmBeneficiaries can ask the court to review any act, omission or decision of a trustee. See s 126 of the Trusts Act. Legal advice is recommended.
Posted by vickiammundsen | April 25, 2021, 10:14 pmHi
I am on a Disability Allowance, I basically live hand to mouth, I do have an inheritance that sits at the Estate lawyer’s office because I refuse to sign the Deed of Indemnity. I wish to pursue a private prosecution against the sole trustee of my father’s Estate. I have kept a comprehensive correspondence trail between this trustee and myself and now have a record spanning 9 months of; his decisions made unilaterally, deals to benefit himself at his fellow beneficiaries expense, misappropriation of trust funds, collusion with another when they purchased my late father’s house well below market value, lies that he has said including three which he instructed the Estate lawyer to forward, add to this a refusal to account, he was even kind enough to use obscene words when abusing me in writing. I have a lot of evidence to use against him in a court of law. My question is what charges do I make against him and the man he colluded with? As 1. it is a civil case yet his dishonesty could escalate it to a criminal case. 2. I would like him removed as the trustee. 3. I want him compelled to present the trust accounts and an inventory of (what was) the Estate property. On the matter of the man that he colluded with; is ‘unconscionable receipt’ the only charge I can bring against him?
Thank you.
Posted by Bruce Sutton | April 26, 2021, 11:12 amThank you for sharing your situation. You raise a number of complex legal issues and legal advise is recommended.
Posted by vickiammundsen | April 26, 2021, 3:50 pmI have just found out that my ex partner has our two children of 8 and 14 in a trust, she owns her own business and declares minimum wage so pays virtually nothing in child support. Could the trust be used to pay the children in some way to lesson the amount of child support paid? Also, as I am the primary carer for the children, can I apply to get details on the children’s behalf? Thanks.
Posted by David S. | June 15, 2021, 7:37 amSection 51(1) of the Trusts Act provides that “There is a presumption that a trustee must make available to every beneficiary or representative of a beneficiary the basic trust information set out in subsection (3).”
Legal advice is recommended.
Posted by vickiammundsen | June 17, 2021, 1:04 amHi I am a beneficiary of a family trust….my mother has been put into a resthome the trustees under both my parents wills are in control of property and assets….the trust wasnt followed in accordance with the wills. My sister and I don’t communicate she has been in house and assisted with removing items from house before sale and after I havent been able to be involved. I’m being told I’m putting up barriers but all I’m asking for is time to get organized I’ve had 4 hours. Can the items of furniture be given to a charity if I dont sign the aggreement.
Posted by Gina Sharp | June 20, 2021, 11:12 pmLegal advice is recommended.
Posted by vickiammundsen | June 20, 2021, 11:42 pmShould all trustees have copy of the trust aggreement and wills of both family trust parties.
Posted by Gina Sharp | June 20, 2021, 11:15 pmSection 45 of the Trusts Act sets out the core documents trustees must keep. 46 of the Trusts Act 2019 provides that each trustee must hold the trust deed (or other document containing the trust terms) and any variations.
Posted by vickiammundsen | June 20, 2021, 11:42 pmIs a trustee legally required to give information re sale of house settlement dates.
Posted by Gina Sharp | June 20, 2021, 11:19 pmThere is a presumption in s 51 of the Trusts Act that trustees must notify basic trust information and a presumption in s 52 that trustees must give information on request. There is a procedure in s 53 for deciding whether the presumption applies. Legal advice is recommended
Posted by vickiammundsen | June 20, 2021, 11:40 pmHi Vicki, I am a beneficiary of my father’s Trust. He had 2 trysts and it’s my understanding that one has been wound up. Since finding out about the changes in trust law effective 31st January 2021 I have recently requested copies of tryst deeds, documents and memorandum of wishes pertaining to myself and my fathers wishes. I also asked for a statement of the trust assets. What would be considered a reasonable timeframe for them to provide me with these documents? Also one of the trustees is my sister who my mother appointed as a trustee a couple of years ago. I know my father would have never agreed with this knowing the bad relationship her and I have had for many years. Her lawyer is also the trusts lawyer. Isn’t this a conflict of interest as she is also a beneficiary. There are other reasons why I feel it’s a conflict of interest and it’s because she doesn’t act impartially, she goes and has meetings with the lawyer and doesn’t involve my mother who is a trustee, she tries to make out that my brother who is a beneficiary has no more entitlement even though a memorandum of wishes states otherwise. I believe she is getting her lawyer to change things which could in turn benefit her.
Posted by Amanda Hore | June 30, 2021, 12:30 amThank you for your e-mail. The Trusts Act 2019 does not define what is a reasonable time-frame. However, guidance can be taken from cases such as Earl v McGuire. See https://mattersoftrust.co.nz/2021/03/08/turning-of-the-tide/. Legal advice is recommended.
Posted by vickiammundsen | June 30, 2021, 12:47 amHi Vicki,
I believe a memorandum of guidance is not legally binding.
Under what circumstances can a trustee disregard the wishes stated in them?
Specifically “ When I die it is my wish that my wife be solely allowed to enjoy and use the assets and income of the trust until her death”
My husband who recently passed away, and I have 3 trusts between us.
One each for the family home, and a joint trust for commercial property.
There are two trustees for all 3 trusts. Myself and my lawyer.
My husband has two sons and I have two sons.
I am a beneficiary of all trusts. All the sons are final beneficiaries of the respective trusts.
Recently because of the law trust changes, my stepson has forced my hand to provide all my financial information. All my income and assets are in the trusts names, so this has meant divulging personal information which I did not want to do.
Now he is objecting to a couple of points in the accounts.
My husband and I had a joint life insurance policy which was paid to me as survivor. I used it to pay off one of the trust mortgages, and have a deed of debt in the accounts.
My stepson believes that should have gone to my husbands’ trust and wants me to change it.
I intend to forgive the debt upon my death but not before, given his current actions.
I also inherited from my father and used this money to pay part of another mortgage off , again with a deed of debt. I am claiming interest for this debt. He is objecting to this.
Both my stepsons each own one or two properties with little or no mortgages( generally speaking). The stepson in question is freehold.
I wish to start a process to help my children in the future get a foot in the property market.
I wish to leverage against the family home and buy small commercial properties with the aim of capital gain and future increased rents to help them out. These will be mostly self-funding, with maybe a small top up from my income if interest rates go beyond 6%.
I am prepared for the guarantees to be from my trust alone, so no liability will be with my husband’s trust if anything goes awry.
Can my stepson as final beneficiary stop me doing this by putting pressure on the other trustee, by claiming its not in the best interests of all the beneficiaries?
What are my rights?
Posted by jaynegower | August 10, 2021, 3:35 pmThank you for your e-mail. You may find the following helpful: https://mattersoftrust.co.nz/2021/05/07/mandatory-or-permissible-and-what-about-subsequent/
Legal advice is recommended.
Posted by vickiammundsen | August 10, 2021, 3:48 pmIn N.Z in the event of all trustees being deceased, are beneficiaries required to pay tax on their heritages? One beneficiary lives in N.Z & one in the U.S.A.
Posted by Lorraine Thomas | August 27, 2021, 11:56 pmIf a trustee (or trustees) die a replacement trustee will need to be appointed unless for example there are three trustees, one dies and the terms of the trust require a minimum of two trustees.
Posted by vickiammundsen | August 27, 2021, 11:59 pmHi Vicki, can you please clarify; a beneficiary of a trust believes they have the right to make a decision around how the trust property should be dealt with including the allocation of proceeds if the property is sold. Trustees have asked for feedback from all beneficiaries as to what they would like to do with the trust property (i.e. own it outright, receive a share of the purchase price). The trustees are about to get a valuation done on the property however this particular beneficiary has stated that if the value isn’t what they expect then they do not want to proceed with the sale of the property. Can the beneficiary dictate these terms to the trustees and if not, if the trustees make a decision to sell the trust property at a value provided by a registered valuer, will the beneficiary have a good chance of a successful claim if they take the trustees to court?
Thanks
Posted by Anne G | September 15, 2021, 7:05 pmThank you for your e-mail. As a general observation trustees of discretionary trusts determine how beneficiaries benefit at the trustees’ discretion. However, in some circumstances, for example where the rule in Saunders v Vautier has application, beneficiaries can direct the trustees with respect to trust property. See https://mattersoftrust.co.nz/2014/01/17/the-minority-can-inherit-the-earth-sometimes/. Further if the trust is a fixed trust, then beneficiaries may have crystallised rights. See part 6 of the Trusts Act 2019 https://www.legislation.govt.nz/act/public/2019/0038/latest/DLM7383041.html. Also see part 7 of the Trusts Act 2019 https://www.legislation.govt.nz/act/public/2019/0038/latest/DLM7383053.html. Legal advice is recommended.
Posted by vickiammundsen | September 19, 2021, 12:15 pmMy husband is a beneficiary of a family trust along with his younger sister and older brother. The older brother is also a trustee along with their mum and dad.
The trust was set up around 20 years ago when the oldest son suggested they sold their family home so they could lend the proceeds of the house sale to him after his marriage dissolved and he lost his home and wanted to buy another. The son paid a pittance in interest to the trust and over the following 10 years the mum and dad lived in a motor home and spent all the interest paid to the trust.
Around 10 years ago mum and dad needed to have a home to live in due to their old age (their in their 80’s) and health and the trust bought a house which resulted in the original loan to the son having to being repaid and a small mortgage being taken out by the trust for the balance of the house purchased.
Over the past 10 years mum and dad have paid off the mortgage, through rent payments to the trust and with the help of family gifting money to them recently and now mum and dad are selling the house to move to a retirement village to an apartment they are purchasing.
There will be an amount of money left over from the house sale of around $300k and mum and dad plan on spending this to supplement their pension.
Question is… does this $300k not still belong to the trust and it should be paid into the trusts bank account
And should mum and dad have access to it to spend willy nilly until it is all gone thus depriving their beneficiaries?
Posted by Kiwi Gal | October 2, 2021, 10:54 amThank you for your e-mail. Legal advice is recommended.
Posted by vickiammundsen | October 2, 2021, 10:28 pmHi,
According to my late grandfather’s will, his estate is to be held in a trust. The sole trustee lives overseas. If all of the beneficiaries were to also live overseas, how might this affect the trust, if at all?
Thank you.
Posted by Kaisei | October 15, 2021, 2:00 pmInterjurisdictional matters involving estates and trusts are complex. Legal and tax advice is recommended.
Posted by vickiammundsen | October 15, 2021, 3:42 pmMy Dad died and ever since then my family have been saying there’s no trust so how can there be no trust if they put my Dads shares into a trust that now belong to me.
Posted by Kirstin Hohipa | January 4, 2022, 9:55 amIt may be that there was a trust that has since been wound up. Of course that does not mean that there was no trust. Legal advice is recommended.
Posted by vickiammundsen | January 4, 2022, 1:12 pmMy ex and I have a trust in my name and his name he has taken my name off as a Beneficiaries how can he do this as I have never signed anything and the trust lawyer also have not signed anything
All farm money is going into his private bank account
How can he do this
What did he have to do to take my name off I only just found out
Posted by Fiona fowlie | May 6, 2022, 8:57 amThank you for your comment. Legal advice is recommended.
Posted by vickiammundsen | May 8, 2022, 10:05 pm(1) Does the Trusts Act govern/regulate an executor in an estate that was probated (w/named beneficiaries)?
(2) If a child predeceases a parent, and that child’s estate devolves to the parent, and then that parent dies leaving a will, naming an executor and beneficiaries and explicit instructions, can the executor of the parent’s estate use a trust to administer the child’s estate? And must said executor establish a trust thru a deed; can he do it on-the-fly?
(3) Lastly, can a beneficiary apply to the court for directions, guidance, etc., via a declaration, without naming a defendant – the attorney (hired by the executor), and/or the executor? More to the point – can the application for a declaration be “one-sided”: You (the beneficiary), the law/act/question which brings you to the court.
Posted by Richard Tett | May 29, 2022, 3:34 pmThe Trusts Act has application to express trusts. A testamentary trust can (but will not necessarily) be an express trust.
Beneficiaries can seek a review of trust decisions (section 126(2) of the Trusts Act).
Legal advice is recommended.
Posted by vickiammundsen | May 29, 2022, 7:31 pmPlease help me I have a major unpaid probate of my Great great Grandfather find documents archives New Zealand Title Lindstrom Gustav Hjalmer- Papakura- Farmer
Item code R9386700
Series code:1570
I direct my Trustees out of my said estate to pay the following legacies however if need be abate proportionately Whangaroa Farmer 6 shares only worried about Roland Lindstroms share my grand father’s father who died when my grandfather was only 10 the Trustees left us to poverty
Posted by Hugh Lindstrom | June 13, 2022, 8:20 pmHello
A Family Trust was established with three trustees (husband and wife and law firms trustee corporation?) Husband passed away over six years ago, wife was executor of his will – apparently it was stipulated in his will that some proceeds of his estate go to the trust. Wife has now passed away and left proceeds of will to daughter. Law firm trustee – now the sole trustee of the family trust due to passing of the husband and wife is also the executor of the wife’s estate and informed daughter of inheritance (this is yet to be distributed as probate has just been granted) Law firm has then subsequently advised daughter that wife/mother should of put some proceeds of husbands estate in the trust but did not do so, so what they informed the daughter would be part of inheritance they believe should be in the trust and not form part of inheritance – how does this work? Does the trust have to make a claim on the wife’s estate? Can they move wife’s finances to the trust? Given the sole trustee and wife’s executor are one in the same is this now a conflict? Should this not of been something the trust dealt with at the time of husbands death and why are they only discovering this now?
Posted by JAM | September 25, 2022, 8:55 amThank you for your e-mail. Legal advice is recommended.
Posted by vickiammundsen | September 25, 2022, 1:16 pmHi ,When a discretionary bennificiary is removed from a family trust as permitted by its trust deed is it necessary to formally notify the bennificiary of their removal .
Posted by Peter Revell | September 27, 2022, 2:13 amCan you open two trust on the same day.
For example 1: Whanau Trust
2: Whanau TRUST
Which has been done
Posted by Maxine | October 12, 2022, 11:51 amThe validity of any express trust will be determined by reference to whether it meets the requirements set out in the Trusts Act 2019. See section 15.
Posted by vickiammundsen | October 12, 2022, 11:05 pmMy mum bf freehold of his house wen he died appointed to executives trust will stated she lives in house til she dies kp up general mantience they sell it goes to charity the also told sell car and very expensive stereo which also go charity 7yrs later executives kpt stero at his home not sold it my mum was also entitled everything in house executive tried cum in tke things from house they also tried gt her smaller shitter house so they could sell his home relocate her she also gave 80 000 dola cheque she found in house wen asked they sd it was no gd he used it but wanted al bnk information she pd the rates the interest on house they done 10 000 repairs on roof didn’t complete it there flooding badly in bk yard my mum approached them to fix it wouldn’t listen she threaten go news outlets now they saying there’s no money left lawyer had has gone another trust taken over my mum but naive something not right here
Posted by Vanessa | November 3, 2022, 5:17 pmWe recommend that you seek legal advice
Posted by vickiammundsen | November 6, 2022, 10:55 pmHi Vicki,
I am the sole beneficiary of a Trust established 2008.
The sole asset of the Trust is a one-half share of a permanently rented residential property.
The Trust was constructed as the means to use my (now ex) partners mother’s home as collateral and obtain bank refinance for the mortgage on the our property.
The registered proprietors of the property are my (now ex) defacto partner and his mother (my trustee).
The mortgage is in the names of my (now ex) defacto partner and his mother (my trustee).
In accordance with The Deed of Declaration of Trust and Indemnity my (now ex) partner and I are jointly and severally liable for the mortgage. When rental income has not been sufficient to cover the repayments both my (now ex) partner and myself have made financial contributions.
At the end of the first financial year under the Trust, our chartered accountant divided the claim for mortgage interest expenses equally between my (now ex) partner and myself.
At the end of the next financial year, and the years following, my trustee (who was now doing the accounts) allocated the total claim for mortgage interest expenses to my (now ex) partner and her son, stating; “although I was making payments, my name was not on the title”
I understand that; although I am the sole beneficiary of a trust holding my one half of the property, I am jointly and severally liable for the mortgage, and, additional to the rental income, I made payments to the mortgage, I have no eligibility to claim any of the mortgage interest expenses because my name is not on the property title. Is this correct?
Thank you so much in advance,
Jackie
Posted by Jacqueline Baker | November 21, 2022, 11:24 amWe recommend that you seek legal and accounting advice.
Posted by vickiammundsen | November 21, 2022, 8:53 pmThank you, I have been waiting for a week for an IRD response so hopefully have an answer back soon 🙂
Posted by vin1808 | November 21, 2022, 10:01 pmI am a beneficiary of a trust, I live in the home trust, took care of Mom through her Alzaimers/Dementia. 2 Brother’s are trustees have lied constantly since day one of being caregiver to our Mom. They got realtor to sell home & have harassed me toget out.I don’t have a place to voand received food stamps what do I do?
Posted by Sylvia | March 16, 2023, 1:33 pmLegal advice is recommended
Posted by vickiammundsen | March 16, 2023, 2:04 pmHi my dad was apart of a family trust and then he died I’m the only daughter that he has I tried to get a hold of my cousin who is trusty and she blocked me his name is Phillip hohipa
Posted by KIRSTIN hohipa | April 6, 2023, 10:41 amVery informative. I do have a question can beneficiaries call for a trust to be wound up simply because they are unhappy with the terms within the trust. (Reaching a certain age before sale of property proceeds becomes available to them)?
Posted by colleen johnson | June 24, 2023, 8:16 pmSee Part 6 (Termination and Variation) of the Trusts Act 2019.
Posted by vickiammundsen | June 24, 2023, 9:49 pmHi,
I have a situation where a discretionary family trust was wound up in 2016. The trust property (a house) was distributed to the surviving settlor.
Do the children of the settlor (as discretionary beneficiaries of the Trust) have any claim on the property or would section 11 of the Limitations Act (6-year limit) apply here?
If the children did have a claim, would the claim defeat a relationship property claim by the settlor’s current partner?
Posted by Clare Kowalewski | October 6, 2023, 9:45 amThank you for your comment. You may find the decision in Kain v Public Trust of interest. See Basically …
Posted by vickiammundsen | October 6, 2023, 9:51 amI am an advisory Trustee of a family trust, the trust has a mortgage on the family trust property. I as an advisory Trustee have been in contact with a couple of mortgage brokers as well as banks to get the property refinanced with a fixed rate… as I am only an advisory trustee,.they all.have advisesd they need to. speak to one of the actual trustee’s (there are two trustees, one a company and one a family member) the contact numbers and names have been given to the one of the Trustees (the family member) to contact them, it has been more.than six months,.with some friendly reminders.and nothing has been done and the floating rate is now over 10%. The family member trustee has been talking about selling the trust property, can they do this? With me.being an advisory Trustee, can I stop the sale? I am.an advisory trustee as well as a final beneficiary.
Posted by moggie101 | January 4, 2024, 2:18 amAn advisory trustee, now a special trust adviser may as set out in section 74 of the Trusts Act 2019 “… advise the trustee on any matter relating to the trust; … but is not a trustee of the trust and does not have the powers or duties of a trustee.”
Legal advice is strongly recommended.
Posted by vickiammundsen | January 4, 2024, 8:14 amIf the original settler (the person who set the trust up and placed.there assets into the trust) is still alive, and also does not want the property sold can they stop the sale?
Posted by moggie101 | January 4, 2024, 8:20 amAs a general observation an effective transfer of property to a trust means a loss of control of the asset. However, this must be considered in light of the terms of the relevant trust. See Saunders v Vautier (1841) 4 Beav 115 and WA Stevenson Memorial Trust [2012] NZHC 3132.
Posted by vickiammundsen | January 4, 2024, 12:56 pm