trust laws

PHOTO: The New Trusts Act comes into effect from January 31, 2021

New Zealand’s love affair with trusts will be tested when new legislation comes into effect early next year, with surprises in store for some trustees and beneficiaries.

The New Trusts Act comes into effect from January 31, 2021 and will replace loose, outdated regulations with best practice systems covering compliance and accountability.

Meeting the new regulations was expected to be a tall order for the trustees of at least some of the estimated 300,000 to 500,000 trusts, because not only will they need to bring their management practices up-to-date, but they will also need to track down and begin communicating with all trust beneficiaries.

“New Zealanders are huge fans of trust… this is a large change that’s going to affect a lot of New Zealanders,” Martelli McKegg law partner Timothy Orr said, adding most trusts had a number of beneficiaries.

He estimated there would potentially be many thousands of people completely unaware they were beneficiaries of trusts, unless they had been receiving some benefit from it.

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