A new era for trusts
In January 2021, New Zealand's Trusts Act 2019 came into force—the most significant change to trust law in decades. For the first time, trustees' duties are clearly spelled out in legislation, and beneficiaries have stronger rights to information.
If you are considering setting up a trust, understanding these new rules from the start will help you make an informed decision.
The mandatory trustee duties
The Act sets out duties that trustees must follow—they can't be removed by the trust deed:
Know the trust deed
Trustees must understand the terms of the trust they're administering.
Act honestly and in good faith
Decisions must be made with integrity.
Act for the benefit of beneficiaries
Or to carry out the trust's purpose if there are no beneficiaries.
Exercise powers properly
Use powers only for the purposes they were given.
Additional default duties
The Act also includes duties that apply unless the trust deed changes them:
General care
Exercise reasonable care when carrying out duties.
Investment care
Invest prudently and review investments regularly.
No conflicts
Avoid conflicts of interest between personal and trustee roles.
Impartiality
Act fairly among different beneficiaries.
No personal benefit
Don't profit from the trustee role (beyond proper fees).
Act together
Make decisions jointly with co-trustees.
The basic trust information
Under the new Act, trustees must give beneficiaries certain "basic trust information" unless there's a good reason not to. This includes:
- That they are a beneficiary
- The name and contact details of trustees
- Their right to request a copy of the trust deed
- Their right to request trust information
This is a significant change from the past, where beneficiaries often didn't know they were named in a trust.
What this means in practice
The new rules have several practical implications:
- • Record-keeping is essential—trustees need to document their decisions and reasoning
- • Family harmony matters—beneficiaries now have clearer rights to information, so communication is important
- • Professional help is valuable—the duties are more clearly defined, but navigating them still requires expertise
For new trusts
If you are setting up a trust now, these rules apply from day one. Modern trust deeds are drafted with the Trusts Act 2019 in mind, which means clearer duties, better record-keeping requirements, and appropriate provisions for beneficiary information.
Starting fresh means building good practices into your trust from the beginning.
Now that you understand the new rules, let's look at your next steps—including what happens when you meet with a lawyer.