Trusts Act 2019

Trusts Act 2019


After a lengthy period of review and consultation, the new Trusts Act 2019 has finally become law.  The Act is to come into force on 30 January 2021.  The new Act makes important changes to trust law in New Zealand and replaces the Trustee Act 1956 and the Perpetuities Act 1964.

It is important that trustees and beneficiaries are aware of the changes and the impact on their rights and obligations, and that trustees use the transition period until 30 January 2021 to ensure their practices align with the provisions of the new Act.

Changes to Trust Law

The Act is intended to modernise and clarify trust law, codify the mandatory and default duties on trustees, simplify the core principles of a trust and provide mechanisms to resolve trust-related disputes.

Some of the most notable changes under the Trust Act 2019 include:

  • The setting out of mandatory and default trustee duties:
    • The five mandatory duties impose on all trustees a duty to know the terms of the trust, a duty to act in accordance with those terms, a duty to act honestly and in good faith, a duty to act for the benefit of beneficiaries, and a duty to exercise the trustee’s powers for proper purposes. These mandatory duties cannot be excluded or modified by the trust deed.
    • The ten default duties apply unless expressly excluded by the trust deed and include a duty to invest prudently, a duty not to exercise power for their own benefit, a duty to avoid a conflict of interest and a duty to act unanimously.
  • The length of a trust has been extended from a maximum of 80 years to a maximum of 125 years.
  • The Act provides that each trustee must keep, for as long as they are a trustee and as far as is reasonable, the following documents relating to the trust:
    • trust deed;
    • variations to trust deed;
    • records of trust property to identify assets, liabilities, income and expenses;
    • records of trustee decisions;
    • written contracts entered into;
    • any accounting records and financial statements prepared;
    • any documents relating to the appointment, removal or retirement of any trustee;
    • any letter or memorandum of wishes from the settlor/s.
  • The Act outlines the basic trust information that is to be provided to every beneficiary, including:
    • the fact that a person is a beneficiary of the trust;
    • the name and contact details of the trustees;
    • the details of each appointment, removal, and retirement of a trustee as it occurs; and
    • the right of the beneficiary to request a copy of the terms of the trust or trust information.

Trustees may only refuse to provide information to beneficiaries after considering both their general obligation to provide information and a series of factors as to the nature of the information and the practicalities of restricting that information.

  • The introduction of mechanisms to resolve trust disputes. In the interest of keeping trust related disputes out of Court where possible, the Act provides for alternative dispute resolution mechanisms such as mediation or arbitration.


Matters for Consideration

At this point you need to be thinking about the implications of the new Trusts Act and whether:

  • you as trustees are willing and able to undertake the increased obligations;
  • you as settlors and/or trustees are comfortable with providing increased information to beneficiaries;
  • the reasons you set up the trust are still relevant.

For existing trusts, the introduction of the Trusts Act could mean that:

  • compliance duties will increase the time and cost of administering some trusts;
  • greater transparency will put things in the open that some settlors or trustees might prefer to keep private.


In the first instance, in advance of the new Trusts Act coming into force on 30 January 2021, you should contact your usual lawyer at Malloy Goodwin Harford to arrange a meeting to review your trust including the trust’s activities, income, expenses, assets and liabilities and the factors relevant to whether basic trust information should be made available to beneficiaries.

Identifying the current location of beneficiaries (e.g. Australia, UK) will also be important as part of a review meeting so that trustees can make decisions around any specialist tax advice they may require given recent tax law developments that have a significant impact on beneficiaries.  We do not provide tax advice but can assist clients to obtain tax advice relevant to their circumstances.