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 Gaza And Burning The Israeli Flag

One of the selling points in New Zealand’s campaign for a temporary seat on the Security Council is that we have a pluckily independent voice to offer on international conflicts.

This image is not entirely self-delusional. When we did occupy a temporary UN Security Council seat in the 1990s, New Zealand was forthright about the need for the international community to actively respond to the Rwanda genocide. On April 14, 1994, New Zealand, Nigeria and the Czech Republic were the only nations to call for a forceful UN intervention to halt the killings. It was a proud moment in the diplomatic record of the Bolger government.

What then, is the current National government doing with respect to the slaughter in Gaza? More>>

 

Parliament Today:

TAIC Report: Urgent Recommendations After Melling Rail Accident

The Transport Accident Investigation Commission has made four urgent recommendations to KiwiRail following the accident two months ago (27 May) when a Matangi passenger train collided with a stop block at Melling Station, Lower Hutt. More>>

ALSO:

Red Tape: Local Regulations Go Under Microscope

The Government says it is accepting nearly all of the recommendations the Productivity Commission has made on ways to improve local regulations. More>>

ALSO:

Spending Questions: Claudette Hauiti To Step Aside At Election

National Party President Peter Goodfellow confirms that he has received notification from List MP Claudette Hauiti that she plans to step aside at the 20 September election. More>>

ALSO:

EPA: Board Of Inquiry Rejects Basin Flyover By Majority Of 3 To 1

The independent Board of Inquiry delegated to decide on the Basin Bridge Proposal has, by a majority decision (3 to 1), cancelled the Transport Agency’s Notice of Requirement and declined its resource consent applications for the construction, operation and maintenance of a flyover on State Highway 1 in Wellington City... More>>

ALSO:

Gordon Campbell: On The Non-Apology To Tania Billingsley

The refusal by Prime Minister John Key to issue a personal apology to Tania Billingsley has been accompanied by an array of excuses... Yesterday though, Key’s choice of words indicated that an apology was the last thing on his mind. More>>

ALSO:

Conventions: Winston Peters On The Nation

Winston Peters opens door to standing in East Coast Bays electorate, says it's an "exciting point" and he's thinking about it. "I’ve had a whole lot of people writing to me and calling up and saying ‘why don’t you have a go in East Coast Bays’." More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news