Trusts Bill

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Hon Andrew Little

Trusts Bill

Government Bill

290—3

	Key
1	Title
2	Commencement
	Part 1 General provisions
3	Purpose
4	Principles
5	Application, and relationship of Act with trust terms, common law and equity, and other enactments
6	Overview of this Act
7	Interpretation of Act
8	Inherent jurisdiction of court not affected
9	Definitions
10	Transitional, savings, and related provisions
11	Act binds the Crown
	Part 2 Express trusts
12	Meaning of express trust
13	Characteristics of express trust
14	Sole trustee cannot be sole beneficiary
15	Creation of express trust
16	Maximum duration of trust
16A	Application of maximum duration rule to resettlements
17	Accumulation of income by trust
18	Distribution of trust property on expiry of trust
19	Age of majority
	Part 3 Trustees’ duties and information obligations
	Subpart 1—Duties of trustee
19A	Guiding principle in performing duties
	Mandatory duties
20	Mandatory duties
22	Duty to know terms of trust
23	Duty to act in accordance with terms of trust
24	Duty to act honestly and in good faith
25	Duty to act for benefit of beneficiaries or to further permitted purpose of trust
26	Duty to exercise powers for proper purpose
	Default duties
26A	Default duties
27	General duty of care
28	Duty to invest prudently
29	Duty not to exercise power for own benefit
30	Duty to consider exercise of power
31	Duty not to bind or commit trustees to future exercise of discretion
32	Duty to avoid conflict of interest
33	Duty of impartiality
34	Duty not to profit
35	Duty to act for no reward
36	Duty to act unanimously
36A	Adviser must alert settlor to modification or exclusion of default duty
	Subpart 2—Exemption and indemnity clauses
37	Restriction on trustee exemption clauses
38	Restriction on trustee indemnity clauses
39	Invalidity of exemption clause or indemnity clause
40	Adviser must alert settlor to liability exclusion or indemnity clause
40A	Court consideration of gross negligence
	Subpart 3—Trustees’ obligations to keep and give trust information
	Documents to be kept by trustees
41	Trustee must keep core documents
42	Keeping documents where there is more than 1 trustee
43	Documents must be kept for duration of trusteeship
44	Trustee must pass on documents
	Giving information to beneficiaries
45	Definitions for purposes of sections 46 to 51
46	Purpose and application of sections 47 to 51
47	Presumption that trustee must notify basic trust information
48	Presumption that trustee must give information on request
49	Procedure for deciding whether presumption applies
50	Procedure when trustee decides to give no information
51	Beneficiary may be required to pay cost of giving information
	Part 4 Trustees’ powers and indemnities
	Subpart 1—Powers of trustee
52	General powers of trustee
53	Status of provisions on specific powers of trustee
	Investment powers
54	Trustee has power to invest
55	Matters which trustee may consider in exercising power to invest
	Power to determine treatment of returns and accounts
56	Power to determine whether return on investment is income or capital
57	Apportionment of receipts and outgoings between income and capital
	Powers to apply trust property for beneficiary’s welfare
58	Trustee’s power to pay or apply income for child beneficiary’s welfare
59	Trustee’s powers with respect to income of child beneficiary
60	Trustee’s power to pay or apply capital for ~~capital~~ beneficiary’s welfare
61	Trustee may impose conditions on payment for beneficiary’s welfare
62	Trustee not liable for certain losses in relation to amounts paid or applied for beneficiary’s welfare
	Exercise of trustee powers and functions by others
63	Trustee’s power to appoint others to exercise or perform certain powers or functions
64	Trustee’s duties to keep appointments under review and to fulfil general duty of care
65	Trustee’s liability for acts of appointee limited
66	Trustee’s power to delegate powers and functions in specified circumstances
67	Notice of delegation of trustee’s powers and functions
68	Trustee’s liability for acts of delegate limited
69	Application to Public Trust to consent to become delegate
	Special trust advisers
70	Role and appointment of special trust advisers
71	Reliance on special trust adviser’s advice
72	Remuneration of special trust advisers
	Other powers and rights of trustee
73	Application of insurance money for loss or damage of trust property
74	Trustee’s power to adjust interests in trust property of portfolio investment entity
75	Trustee’s liability limited where notice given to distribute trust property without regard to unknown claims
	Protection of purchasers and mortgagees dealing with trustees
76	Protection of purchasers and mortgagees dealing with trustees
	Subpart 2—Trustees’ indemnities
77	Trustee’s liability for expenses and liabilities incurred, and trustee’s right to indemnity
78	Indemnification of trustee with agreement of beneficiaries where indemnity impaired
78A	Power of court to approve indemnification
78B	Power of court to waive requirement of consent to indemnification
79	Ranking of trust property
80	Creditor’s limited claim to trust property through trustee’s indemnity
81	Trustee’s lien on insurance money for premiums
82	Trustee’s indemnity for rent, covenant, or agreement under lease
83	Protection of trustee in handing over personal property to life tenant
84	Protection of trustee in handing over personal property to child
85	Protection relating to notice when person trustee of more than 1 trust
	Part 5 Appointment and discharge of trustees
	Power to remove or to appoint trustee
86	Who may remove trustee and appoint replacement
87	Person with power to remove or appoint trustee may apply to court for directions
88	Duty to exercise power to remove or appoint trustee honestly and for proper purpose
89	Application to review exercise of power to remove or to appoint trustee
	Appointment of trustee
90	Who may be appointed as trustee
91	Statutory trustee may be sole trustee
92	How trustee is appointed
93	How trustee accepts or rejects appointment
94	Acts of trustee not invalidated by defect in appointment
	Retirement of trustee
95	How trustee retires
	Death of trustee
96	Devolution of powers on death of trustee
	Removal of trustee
97	How trustee is removed
97A	Compulsory removal of trustee
97B	Optional removal of trustee
98	Notice of decision to remove
99	Effect of notice
100	Removal where notice cannot be given
101	Application to prevent removal
102	Procedure on trustee’s application to prevent removal
103	Court may make order preventing removal
104	Court may make order for removal
	Replacement of trustee
105	How trustee is replaced
106	Court may appoint or replace trustee
107	Replacing sole trustee with multiple trustees
	Divesting and vesting of trust property
108	Divesting and vesting of trust property on change of trustees
109	Requirements to notify, register, or record divesting and vesting of trust property
110	Requirement to assist in transfer of trust property
111	Protection in relation to notifying, registering, or recording transfer of trust property
112	Departing trustee must be given certain documents
	Part 6 Termination and variation of trusts
113	Termination of trust by unanimous consent of beneficiaries
114	Variation or resettlement of trust by unanimous consent of beneficiaries
115	Beneficiary’s right to share of trust property
116	Power of court to approve termination, variation, or resettlement of trust
117	Power of court to waive requirement of consent to termination, variation, or resettlement of trust
	Part 7 Court powers and dispute resolution
118	Court may review trustee’s act, omission, or decision
119	Procedure for court’s review of trustee’s act, omission, or decision
120	Court may take into account investment strategy in action for breach of trust
121	Court may set off gains and losses arising from investment
122	Power of court to vary or extend trustees’ powers in relation to property
123	Court may relieve trustee from personal liability
124	Court may make beneficiary indemnify trustee for breach of trust
125	Trustee may apply to court for directions
126	Protection of trustee while acting under direction of court
127	Trustee may apply to court to bar claims
128	Trustee may apply to court to allow distribution of missing beneficiaries’ shares
129	Trustee may sue self in different capacity
130	Court may appoint receiver for trust
131	Court may order payment of remuneration to trustee
132	Court may charge costs on trust property
	Jurisdiction of Family Court
136	Jurisdiction of Family Court
	Alternative dispute resolution
137	Definitions for purposes of sections 138 to ~~142~~ 142A
138	Power of trustee to refer matter to alternative dispute resolution process
139	ADR process for internal matter if trust has beneficiaries who are unascertained or lack capacity
140	Power of court to order ADR process for internal matter
141	Trustee may give undertakings for purposes of ADR settlement or arbitration agreement and any arbitral award
142	Trustee’s liability in relation to ADR settlement or arbitration agreement and any arbitral award limited
142A	Application of Arbitration Act 1996
	Part 8 Miscellaneous provisions
	Transfer to the Crown
143	Transfer to the Crown of non-distributable trust property
143A	Financial products transferred to the Crown
144	Administration by the Crown of transferred property
145	Public notice of property transferred to the Crown
	Investigation of condition and accounts of certain trust property
146	Application to Public Trust for investigation of condition and accounts of trust property
147	Appointment of investigator by Public Trust
148	How investigator is to conduct and report on investigation
149	Costs of investigation borne by trustees
150	Application to court to determine who bears costs of investigation
151	Application to court to cease investigation
	Life tenant to have powers of trustee in certain cases
152	Life tenant to have powers of trustee in certain cases
	Transitional regulations
153	Regulations providing for transitional matters
	Consequential amendments and repeals
154	Consequential amendments
155	Repeals
	Part 9 Amendments to other Acts
	Subpart 1AAA—Amendments to Arbitration Act 1996
155A	Amendments to Arbitration Act 1996
155B	New section 10A inserted (Arbitration of trust matters)
	10A	Arbitration of trust matters
	Subpart 1—Amendments to Financial Markets Conduct Act 2013
156	Amendments to Financial Markets Conduct Act 2013
157	New section 110A and cross-heading inserted
		Application of Trusts Act 2017
	110A	Application of Trusts Act 2017
158	Section 112 amended (General duties applying in exercise of supervisor’s functions)
159	Section 143 amended (General duties applying in exercise of manager’s functions)
160	Section 153 amended (General duties applying in exercise of supervisor’s functions)
161	New section 155A and cross-heading inserted
		Application of Trusts Act 2017
	155A	Application of Trusts Act 2017
162	Section 548 amended (Other regulations)
163	Section 550 amended (Procedural requirements for regulations relating to exemptions, exclusions, and definitions)
163A	Section 556 amended (FMA may grant exemptions)
163B	Section 557 amended (Restriction on FMA’s exemption power)
163C	Schedule 3 amended
	Subpart 2—Amendments to Financial Advisers Act 2008
164	Amendments to Financial Advisers Act 2008
165	New section 77TA and cross-heading inserted
		Application of Trusts Act 2017
	77TA	Application of Trusts Act 2017
166	Section 154 amended (General regulations)
	Subpart 3—Amendment to Financial Markets Authority Act 2011
167	Amendment to Financial Markets Authority Act 2011
168	Schedule 1 amended
	Subpart 3A—Amendments to Financial Services Legislation Amendment Act 2019
168A	Amendments to Financial Services Legislation Amendment Act 2019
168B	Section 29 amended (New subparts 5A and 5B of Part 6 inserted)
		Application of Trusts Act 2017
	431ZJ	Application of Trusts Act 2017
	Subpart 4—Amendment to Retirement Villages Act 2003
1169	Amendment to Retirement Villages Act 2003
2170	New section 105A inserted (Regulations exempting from provisions of Trusts Act 2017)
	105A	Regulations exempting from provisions of Trusts Act 2017
	Schedule 1 Transitional, savings, and related provisions
	Schedule 2 Provisions that apply except as modified or excluded in accordance with section 5(3A)
	Schedule 3 Specified commercial trusts
	Schedule 4 Amendments consequential on repeal of Trustee Act 1956
	Schedule 5 Amendments consequential on repeal of Perpetuities Act 1964 and abolition of rule against perpetuities
	Legislative history

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