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Winding up trusts

Winding up a trust means bringing a trust to an end.

Trusts can be wound up with the assistance of the court (Bell v Thomson)

References

  • Bell v Thomson [2014] NZHC 724

Discussion

8 thoughts on “Winding up trusts

  1. Can a family Trust be replaced by another Trust?

    Posted by Don & Doreen Coles | February 20, 2018, 7:02 pm
    • The starting point is to review the terms of the trust to establish whether it is permissible to transfee trust assets to another trust by way of distribution or pursuant to a power of resettlement. Legal advice is recommended.

      Posted by vickiammundsen | February 20, 2018, 8:30 pm
  2. If all beneficiaries are of legal age and agreed with the trustees to the early final distribution of all of the trust assets- but the trust deed does not have a clause specifically allowing the winding up of the trust – can the trustees vary the trust by adding a clause to allow them to now wind it up if all parties agree to this?

    Posted by Kerry | May 7, 2019, 3:05 pm
    • If all beneficiaries are of legal age and consent the rule in Saunders v Vautier can have application.

      The rule in Saunders v Vautier allows the final beneficiaries of a trust to bring the trust to an end provided that all of the trustees are in agreement and are of age. The rule is described in Lewin on Trusts as follows:

      “If there is only one beneficiary, or if there are several beneficiaries all of full age and capacity and of one mind, the specific execution of the trust may be stayed and the special trust will acquire the children of a bare or simple trust; for through whatever channel the settlor may have intended his bounty to flow, the beneficiaries, as the persons ultimately to be benefited, are in equity and from the creation of the trust, and before the trustees have acted in the execution of the trust, the absolute beneficial proprietors. The principle applies both to a trust fund as a whole and to a particular gift out of a fund, such as legacy.”

      Posted by vickiammundsen | May 14, 2019, 12:10 am
  3. Where would I find the process for winding up a complying trust please?

    Posted by Lavinia Mattson | June 3, 2019, 1:02 pm
    • The process will depend on the terms of the trust, the assets and liabilities of the trust and the reasons for winding up the trust – for example exercise of a discretion or because the trust has vested. Legal advice is recommended.

      Posted by vickiammundsen | June 4, 2019, 11:47 pm
  4. I am beneficiary of a family house trust and we are considering winding it up and distributing the assets. Could you give me an approximate estimation on what the legal fees would be if we dismantled the trust?

    Posted by Tonya Lilburn | June 24, 2019, 10:45 pm

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