Coat of Arms of New Zealand

Trusts Act 2019

Public Act
 
2019 No 38
Date of assent
 
30 July 2019
Commencement
 
see section 2

Contents

1Title
2Commencement
3Purpose
4Principles
5Application, and relationship of Act with trust terms, common law and equity, and other enactments
6Overview of this Act
7Interpretation of Act
8Inherent jurisdiction of court not affected
9Definitions
10Transitional, savings, and related provisions
11Act binds the Crown
12Meaning of express trust
13Characteristics of express trust
14Sole trustee cannot be sole beneficiary
15Creation of express trust
16Maximum duration of trust
17Application of maximum duration rule to resettlements
18Accumulation of income by trust
19Distribution of trust property on expiry of trust
20Age of majority
21Guiding principle in performing duties
22Mandatory duties
23Duty to know terms of trust
24Duty to act in accordance with terms of trust
25Duty to act honestly and in good faith
26Duty to act for benefit of beneficiaries or to further permitted purpose of trust
27Duty to exercise powers for proper purpose
28Default duties
29General duty of care
30Duty to invest prudently
31Duty not to exercise power for own benefit
32Duty to consider exercise of power
33Duty not to bind or commit trustees to future exercise of discretion
34Duty to avoid conflict of interest
35Duty of impartiality
36Duty not to profit
37Duty to act for no reward
38Duty to act unanimously
39Adviser must alert settlor to modification or exclusion of default duty
40Restriction on trustee exemption clauses
41Restriction on trustee indemnity clauses
42Invalidity of exemption clause or indemnity clause
43Adviser must alert settlor to liability exclusion or indemnity clause
44Court consideration of gross negligence
45Trustee must keep core documents
46Keeping documents where there is more than 1 trustee
47Documents must be kept for duration of trusteeship
48Trustee must pass on documents
49Definitions for purposes of sections 50 to 55
50Purpose and application of sections 51 to 55
51Presumption that trustee must notify basic trust information
52Presumption that trustee must give information on request
53Procedure for deciding whether presumption applies
54Procedure when trustee decides to give no information
55Beneficiary may be required to pay cost of giving information
56General powers of trustee
57Status of provisions on specific powers of trustee
58Trustee has power to invest
59Matters which trustee may consider in exercising power to invest
60Power to determine whether return on investment is income or capital
61Apportionment of receipts and outgoings between income and capital
62Trustee’s power to pay or apply income for child beneficiary’s welfare
63Trustee’s powers with respect to income of child beneficiary
64Trustee’s power to pay or apply capital for beneficiary’s welfare
65Trustee may impose conditions on payment for beneficiary’s welfare
66Trustee not liable for certain losses in relation to amounts paid or applied for beneficiary’s welfare
67Trustee’s power to appoint others to exercise or perform certain powers or functions
68Trustee’s duties to keep appointments under review and to fulfil general duty of care
69Trustee’s liability for acts of appointee limited
70Trustee’s power to delegate powers and functions in specified circumstances
71Notice of delegation of trustee’s powers and functions
72Trustee’s liability for acts of delegate limited
73Application to Public Trust to consent to become delegate
74Role and appointment of special trust advisers
75Reliance on special trust adviser’s advice
76Remuneration of special trust advisers
77Application of insurance money for loss or damage of trust property
78Trustee’s power to adjust interests in trust property of portfolio investment entity
79Trustee’s liability limited where notice given to distribute trust property without regard to unknown claims
80Protection of purchasers and mortgagees dealing with trustees
81Trustee’s liability for expenses and liabilities incurred, and trustee’s right to indemnity
82Indemnification of trustee with agreement of beneficiaries where indemnity impaired
83Power of court to approve indemnification
84Power of court to waive requirement of consent to indemnification
85Ranking of trust property
86Creditor’s limited claim to trust property through trustee’s indemnity
87Trustee’s lien on insurance money for premiums
88Trustee’s indemnity for rent, covenant, or agreement under lease
89Protection of trustee in handing over personal property to life tenant
90Protection of trustee in handing over personal property to child
91Protection relating to notice when person trustee of more than 1 trust
92Who may remove trustee and appoint replacement
93Person with power to remove or appoint trustee may apply to court for directions
94Duty to exercise power to remove or appoint trustee honestly and for proper purpose
95Application to review exercise of power to remove or to appoint trustee
96Who may be appointed as trustee
97Statutory trustee may be sole trustee
98How trustee is appointed
99How trustee accepts or rejects appointment
100Acts of trustee not invalidated by defect in appointment
101How trustee retires
102Devolution of powers on death of trustee
103How trustee is removed
104Compulsory removal of trustee
105Optional removal of trustee
106Notice of decision to remove
107Effect of notice
108Removal where notice cannot be given
109Application to prevent removal
110Procedure on trustee’s application to prevent removal
111Court may make order preventing removal
112Court may make order for removal
113How trustee is replaced
114Court may appoint or replace trustee
115Replacing sole trustee with multiple trustees
116Divesting and vesting of trust property on change of trustees
117Requirements to notify, register, or record divesting and vesting of trust property
118Requirement to assist in transfer of trust property
119Protection in relation to notifying, registering, or recording transfer of trust property
120Departing trustee must be given certain documents
121Termination of trust by unanimous consent of beneficiaries
122Variation or resettlement of trust by unanimous consent of beneficiaries
123Beneficiary’s right to share of trust property
124Power of court to approve termination, variation, or resettlement of trust
125Power of court to waive requirement of consent to termination, variation, or resettlement of trust
126Court may review trustee’s act, omission, or decision
127Procedure for court’s review of trustee’s act, omission, or decision
128Court may take into account investment strategy in action for breach of trust
129Court may set off gains and losses arising from investment
130Power of court to vary or extend trustees’ powers in relation to property
131Court may relieve trustee from personal liability
132Court may make beneficiary indemnify trustee for breach of trust
133Trustee may apply to court for directions
134Protection of trustee while acting under direction of court
135Trustee may apply to court to bar claims
136Trustee may apply to court to allow distribution of missing beneficiaries’ shares
137Trustee may sue self in different capacity
138Court may appoint receiver for trust
139Court may order payment of remuneration to trustee
140Court may charge costs on trust property
141Jurisdiction of Family Court
142Definitions for purposes of sections 143 to 148
143Power of trustee to refer matter to alternative dispute resolution process
144ADR process for internal matter if trust has beneficiaries who are unascertained or lack capacity
145Power of court to order ADR process for internal matter
146Trustee may give undertakings for purposes of ADR settlement or arbitration agreement and any arbitral award
147Trustee’s liability in relation to ADR settlement or arbitration agreement and any arbitral award limited
148Application of Arbitration Act 1996
149Transfer to the Crown of non-distributable trust property
150Financial products transferred to the Crown
151Administration by the Crown of transferred property
152Public notice of property transferred to the Crown
153Application to Public Trust for investigation of condition and accounts of trust property
154Appointment of investigator by Public Trust
155How investigator is to conduct and report on investigation
156Costs of investigation borne by trustees
157Application to court to determine who bears costs of investigation
158Application to court to cease investigation
159Life tenant to have powers of trustee in certain cases
160Regulations providing for transitional matters
161Consequential amendments
162Repeals
163Amendments to Arbitration Act 1996
164New section 10A inserted (Arbitration of trust matters)
10AArbitration of trust matters
165Amendments to Financial Markets Conduct Act 2013
166New section 110A and cross-heading inserted
110AApplication of Trusts Act 2019
167Section 112 amended (General duties applying in exercise of supervisor’s functions)
168Section 143 amended (General duties applying in exercise of manager’s functions)
169Section 153 amended (General duties applying in exercise of supervisor’s functions)
170New section 155A and cross-heading inserted
155AApplication of Trusts Act 2019
171Section 548 amended (Other regulations)
172Section 550 amended (Procedural requirements for regulations relating to exemptions, exclusions, and definitions)
173Section 556 amended (FMA may grant exemptions)
174Section 557 amended (Restriction on FMA’s exemption power)
175Schedule 3 amended
176Amendments to Financial Advisers Act 2008
177New section 77TA and cross-heading inserted
77TAApplication of Trusts Act 2019
178Section 154 amended (General regulations)
179Amendment to Financial Markets Authority Act 2011
180Schedule 1 amended
181Amendments to Financial Services Legislation Amendment Act 2019
182Section 29 amended (New subparts 5A and 5B of Part 6 inserted)
431ZJApplication of Trusts Act 2019
183Amendment to Retirement Villages Act 2003
184New section 105A inserted (Regulations exempting from provisions of Trusts Act 2019)
105ARegulations exempting from provisions of Trusts Act 2019
Legislative history
Administrative information

The Parliament of New Zealand enacts as follows: