Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 


Review of the law of trusts

UNDER EMBARGO UNTIL 12 NOON 13 NOVEMBER 2012
1
MEDIA RELEASE

13 November 2012

Hon Sir Grant Hammond KNZM

President

Law Commission

REVIEW OF THE LAW OF TRUSTS – GENERAL RELEASE

LAW COMMISSION SEEKS FEEDBACK ON PROPOSALS TO MODERNISE AND CLARIFY TRUSTS LAW

The Law Commission is seeking feedback on a number of proposed reforms designed to make the law governing trusts clearer and more accessible to the tens of thousands of New Zealanders who use them.

Trusts provide an alternative way of managing property or other assets and are unusually common in this country. Trusts serve a wide variety of purposes including allowing self-employed persons to separate business from personal assets and providing a mechanism for the orderly control and transmission of wealth, such as a family farm. They are set up privately with no requirement to register or report.

Law Commission President Grant Hammond said:

“Trust law has evolved over hundreds of years and is largely the result of the English judge-made law of equity. In New Zealand this has been overlaid with a fifty-year old statute, the Trustee Act 1956.
“The key objective of our proposed reforms is to translate this mosaic of case and statute law into a clear, fit-for-purpose statute so that those entering into a trust relationship fully understand the legal implications.”

The Law Commission says it appears a large number of New Zealand’s trusts are simple family trusts with limited trust property – perhaps just the family home.

However it says there is evidence to suggest that some trusts have been settled without a clear purpose or solid understanding of what the trust relationship fully involves.

Consultation on earlier discussion papers suggests a proportion of trusts are not well-administered and some trustees do not adequately understand the obligations that their role entails.

Sir Grant said “given the prevalence of trusts in New Zealand it is vital that those settling trusts, and those responsible for their control and management clearly understand the purpose for which the trust was designed and their obligations to the trusts’ beneficiaries.”

Trusts are a legally binding relationship between parties: the settlor, who establishes the trust; the trustees, who are entrusted with the management and control of the trust’s assets; and the beneficiaries, who are entitled to benefit from the trust.

Sir Grant said it was not surprising that the nature of the trust relationship and its legal implication was not always well understood by the parties given the age, complexity and inaccessibility of the law. The Commission thinks it is in the public interest to have a modern statute which establishes benchmarks as to how a trust is to be managed and increases the accountability of trustees.

The Commission’s proposals have been published in a Preferred Approach paper which brings together the key findings and recommendations that have emerged during stage one of their comprehensive review.

The proposed new statute would:

• Provide a clear definition of what constitutes a trust and the essential requirements that must be met for a trust to come into existence;

• Provide a simplified summary of the duties of trustees;

• Set out which trustee duties would apply to all trusts and could not be over-ruled by individual trust deeds, including a minimum requirement for the records that a trustee must keep about the trust;

• Streamline the law and provide ways to reduce the reliance on the court to resolve administrative issues.

The Preferred Approach paper is available on the Commission’s website:
www.lawcom.govt.nz/project/review-law-trusts/publication/preferred-approach-paper

The Commission is seeking comments from submitters as to whether they consider the proposals would be beneficial or whether there are any issues with how they would work in practice. The submission period closes on 22 February 2013.

The Commission will release a final report with recommendations in 2013.

-ENDS-

Law_of_Trustsdetails.pdf

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

Gordon Campbell: On The Ombudsman’s Verdict On Paula Rebstock And Ian Rennie

Unfortunately, the brave and damning report by Ombudsman Ron Paterson on the “flawed” and “unfair” inquiry conducted by Dame Paula Rebstock into events at MFAT pulls back the veil on a far wider issue. More>>

ALSO:

Charities' Report: Stressed Families - Overstretched Services

“Like so many of the whānau and families they serve social service organisations are under huge financial stress. The support demanded from desperate people in communities is far outreaching the resources available.” More>>

ALSO:

Detention: Wellingtonians Protest Treatment Of Refugees

Peace Action Wellington (PAW) and around 50 Wellingtonians blockaded the Australian High Commission, creating a symbolic detention centre to protest the Australian Government's policy of mandatory offshore detention for refugees and asylum seekers. More>>

ALSO:

Diver's Alarums: Breach Means Training Provider Must Repay $1.47 Million

The New Zealand School of Outdoor Studies is to repay $1.47 million (GST-exclusive) to the Tertiary Education Commission (TEC) following an investigation which showed that some student enrolments between 2009 -2014 could not be validated and that courses were under-delivered against their agreement with the TEC. More>>

ALSO:

Education: Government Plans Suggest Bulk Funding Return

Plans by the Government to return to bulk funding are likely to see increased class sizes and schools most in need missing out on much-needed resources, Labour’s Acting Education spokesperson Grant Robertson says. More>>

ALSO:

Interim Report: Auckland Looks Long Term To Pay-Per-Km Road Pricing

Aucklanders can expect to be paying variable rates per kilometre to travel on the city's most congested roads under an emerging transport strategy being formulated by the government and the Auckland Council. More>>

ALSO:

Despite Promises: Government Extends Iraq Deployment

Cabinet has agreed to extend New Zealand’s contribution to the joint New Zealand-Australia mission to train Iraqi Security Forces until November 2018. More>>

ALSO:

On The 'Terrorism' Card:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news