Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Firing Trustees Proves Expensive

Media Release
30 November 2006

Firing Trustees Proves Expensive

Many of the thousands of people who have established trusts in recent years are now facing unexpected legal bills to change trustees. These bills can run to thousands of dollars depending on the assets held in the trust.

As the trust industry matures over the coming years there will be an increase in the number of trusts requiring changes to their trustees. These changes can be for a number of reasons such as firing inactive trustees, replacing trustees retiring from practice or even the death of a trustee. The key point is that trustees have a duty to secure the assets into their name(s) therefore it must be done.

“The documentation required to change trustees is fairly straightforward” says Mark Maxwell, Chief Executive for Trust Management Specialists - Integrity Trust Limited. “However it is the need to change the assets into the names of the new trustees where significant cost can be incurred”.

Generally the most expensive assets to transfer to new trustees are property. This is because the title must be altered to reflect the new owners and if there is a mortgage, replacement documentation is going to be needed as well. This involves roughly the same work for your lawyer as a normal property transaction. Even a trust with the family home as the sole asset will cost hundreds of dollars to change trustee.

“The issue of costs for changing trustees is yet another that has not been fully explained to clients” says Maxwell. The question of who will pay these costs is an interesting one. For example, should a client pay for a retiring lawyer if it is at the lawyer’s request?

As trustees learn more about what is involved in their role Maxwell expects the issue of changing trustees to surface time and again. “We are seeing clients regularly that are not happy paying these costs mainly because they were never told they would have to”.

While there are a few things that can be done to avoid some of these issues, such as having a corporate trustee, the most important thing is to choose your trustees carefully. Having a professional independent trustee is not always the answer. It may be better to appoint a good friend as independent trustee but be supported by a professional to ensure all duties are discharged.

Regardless of who is appointed as trustee, the most important thing is that they understand their responsibilities and discharge them to the best of their ability.

Mark Maxwell is Chief Executive and co-founder of Integrity Trust Limited (www.integritytrust.co.nz), a company specialising in trust management. Mark has extensive experience in the trust industry after a 17 year career with Public Trust where he held a number of senior roles, including General Manager of Charitable Services and National Manager, Trustee Services Development.

END

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 



All District Health Boards: Historic Pay Equity Settlement

An historic agreement has been ratified that addresses a long-standing undervaluation of a workforce that is critical to the smooth running of our hospitals and the delivery of healthcare... More>>


MPI: Dry Autumn In Waikato And South Auckland Leads To Drought Classification Drought conditions affecting the primary sector in the Waikato and South Auckland were today classified as a medium-scale adverse event, enabling a package of support for farmers and growers... More>>



Commerce Commission: Invites Feedback On Its Initial Views Of Wellington Airport’s Pricing Decisions

The Commerce Commission is inviting feedback on its initial views, released today, about Wellington Airport’s pricing decisions for specified airport services, such as aircraft parking or airfield and passenger terminal charges, for the period 1 April 2019 to 31 March 2024... More>>



Barfoot & Thompson: Rents Up By Around 3% In Most Areas

The average weekly rent paid for homes in most areas of Auckland has risen by around 3 percent year-on-year. The figures for end March from more than 16,000 properties... More>>


DoC: Smeagol The ‘Gravel Maggot’ Leaves Its Rare Mark On The Remote West Coast
An extremely rare species of sea slug or ‘gravel maggot’ has been detected for the first time on a remote beach in South Westland... More>>



Immigration: Annual Net Migration Loss Of 7,300

The provisional net loss of 7,300 people in the year ended March 2022 was the lowest net migration for a March year since 2012, Stats NZ said today... More>>