A review of the law of trusts in New Zealand and the Trustee Act 1956 has been completed (subject to further work on specific areas such as corporate trustees and charitable trusts). The review was carried out by the Law Commission, which published five issues paper and a final report with a recommended new Trusts Bill in its review of the law of trusts.
The first issues paper provides a comprehensive review of the history of trusts.
The second issues paper considers the use of trusts (especially family trusts) in New Zealand. This paper also look at the purposes for which family trusts are established including creditor protection, protection from relationship property claims, tax planning and meeting eligibility thresholds for government assistance. The paper also examines different legislative and judicial responses to the use of trusts that look through or disregard a trust where a trust may have been used to frustrate the underlying policies of particular statutes.
The third issues paper considers the rule against perpetuities and whether the current 80 year rule is still valid. This issues paper also considers the revocation and variation of trusts.
The fourth issues paper focuses on trustee duties, the office of trustee, and trustee powers. The Law Society has issued a response to this issues paper, which can be seen at http://www.lawsociety.org.nz/
The fifth issues paper covers jurisdictional issues, trading trusts and other matters including dispute resolution options for trustees, registration and reporting obligations and regulation of trust service providers.
The sixth paper, a final report, Review of the Law of Trusts: A Trusts Act for New Zealand (“the Report”) was tabled in Parliament in 11 September 2013. This report recomends a new Trusts Act for New Zealand to replace, and significantly exapnd on, the current Trustee Act 1956. The Report makes a total of 51 recommendations addressing a wide range of matters relating to trusts, trustees, beneficiaries, creditors of trusts and the powers of the courts. Some of the key reforms recomended include:
In response the Government later released an exposure Draft for a new Trusts Bill and commenced an extensive consultation process.
Subsequently, in 2017, a further revised Trusts Bill was introduced into Parliament that included some significant changes to the law of trusts. The Bill was enacted in July 2019, received Royal Assent on 30 July 2019 and will come into full effect on 30 January 2021. See Trusts Bill obtains Royal Assent.