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

 

Wellington: Predator Free Capital Plan

Wellington City Council (WCC), the Greater Wellington Regional Council (GWRC) and NEXT Foundation, today announced a joint collaboration to make Wellington the first Predator Free capital city in the world. More>>

ALSO:

Gordon Campbell: On Judith Collins’ Efforts At Self Correction

Thousands of prisoners currently in prison may be entitled to an earlier release than expected – and compensation – because Corrections has incorrectly calculated their term of imprisonment. Unless of course, the government buries its mistakes by changing the law and retro-actively getting itself off the hook… More>>

ALSO:

More Justice & Corrections

Sector Opposes Bill: Local Government Bill Timeframe Extended

The Minister of Local Government Peseta Sam Lotu-Iiga has asked the Select Committee to extend the report back date for the Local Government Act 2002 Amendment Bill (No 2). More>>

ALSO:

Breed Laws Don’t Work: Vets On New National Dog Control Plan

It is pleasing therefore to see Louise Upston Associate Minister for Local Government calling for a comprehensive solution... However, relying on breed specific laws to manage dog aggression will not work. More>>

ALSO:

Not Waiting On Select Committee: Green Party Releases Medically-Assisted Dying Policy

“Adults with a terminal illness should have the right to choose a medically assisted death,” Green Party health spokesperson Kevin Hague said. “The Green Party does not support extending assisted dying to people who aren't terminally ill because we can’t be confident that this won't further marginalise the lives of people with disabilities." More>>

ALSO:

General Election Review: Changes To Electoral Act Introduced

More effective systems in polling places and earlier counting of advanced votes are on their way through proposed changes to our electoral laws, Justice Minister Amy Adams says. More>>

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news