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 War Crimes And The Afghan Insurgency

Truly, with friends like former defence Minster Wayne Mapp, the SAS does not need enemies. At the very least, the Hit and Run book has raised the possibility that the New Zealand SAS committed war crimes in the attack they led in Afghnistan upon the villages of Naik and Khak Khuday Dad...

Mapp’s attempted defence of the SAS on RNZ this morning unintentionally indicated that collective punishment was baked into the planning exercise for the raid, and also into how the raid proceeded on the ground. More>>

 

Biscuit Tin Of Democracy: World Heritage Site Protection, Ombudsman and Equal Pay Bills Drawn

On Thursday, 23 March 2017 three places are available on the Order Paper for the first reading of a Member’s bill. The ballot was held, and resulted in the following bills being drawn... More>>

ALSO:

Emissions Plan: NZ Needs More Science, More Trees, Fewer Beasts

A combination of technology breakthroughs, much more plantation forestry, and a big switch away from pastoral, particularly dairy farming, are identified as the key elements of any approach New Zealand takes to reducing its carbon emissions to a net zero level, according to a new report sponsored by the New Zealand chapter of GLOBE, a multi-party, global parliamentary grouping. More>>

ALSO:

"Backed To Win Seats": Labour Māori Seat MPs Won't Stand On List

The Labour Party is backing a request from its Māori seat MPs to stand as electorate MPs only, says Labour Leader Andrew Little. More>>

Productivity Commission: New Models Of Tertiary Education Are Coming

The report is a broad-ranging inquiry into how well New Zealand’s tertiary education system is set up to respond to emerging trends in technology and the internationalisation of education, and changes in the structure of the population, and the skills needed in the economy and society... More>>

ALSO:

PM's Press Conference: Water Everywhere

Monday's Post-Cabinet press conference focused on water, with the Prime Minister fielding questions about the possibility pricing water taken for export. Mr English said the government was directing their water allocation technical advisory group to include export water in considerations. More>>

ALSO:

Kim Workman: Reality Check Needed For Public Service Reoffending Target

Reducing the prison population results in a reduction in re-offending. Shortening sentences reduces reoffending... More>>

ALSO:

PSA: Minister Should Stop Dodging On Salisbury School

"The decision around the future of Salisbury School has been overdue for months, and the ambiguity is leaving parents, staff and students in limbo. It’s time the Minister stopped hiding, muddying the waters and being dishonest about her Ministry’s intentions," says Erin Polaczuk, PSA national secretary. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news