Outdated deed provisions
Many older trust deeds contain provisions that are now inconsistent with the Trusts Act 2019 or that use language and concepts that have become problematic.
Examples we commonly see:
- Mismatches with tax law: deeds that deem income to be capital before the trust's tax return is filed.
- Ambiguous beneficiary classes: Terms like "grandchildren" that don't clearly cover adopted or step-grandchildren
- Missing powers: Older deeds often lack powers for modern investments or tax planning
- Inflexible vesting: Fixed vesting dates that don't allow extension
Poor administration
A trust on paper is only as good as how it's run in practice. We frequently find:
Decisions made informally without proper resolution
Trust and personal funds in the same accounts
Settlor making all decisions without trustee involvement
No written record of distributions or decisions
"These issues can be fatal to asset protection claims. If you've been treating trust property as your own, a court may well agree with you."
Trustee problems
We often find trusts where the trustee structure has become problematic:
- 1 Only one trustee: Most deeds require two and many require an independent trustee.
- 2 Deceased trustees: Trustee appointments never updated after a death
- 3 Incapable trustees: Trustees who have lost mental capacity
- 4 Conflicted trustees: All trustees are also primary beneficiaries
Trust no longer needed
Sometimes the biggest issue is that the trust simply isn't necessary anymore. Common scenarios:
- Business risks have been addressed or the business sold
- Rest home subsidy planning is no longer relevant
- Relationship property concerns have been addressed by marriage or death
- The cost and complexity of maintaining the trust outweighs the benefits
We'll help identify what issues affect your trust. Call us on 06 835 7394.
What we do at this stage
We identify the issues specific to your trust and explain their implications.