Trusts Bill

  • enacted

Hon Andrew Little

Trusts Bill

Government Bill



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

The Parliament of New Zealand enacts as follows: