Home » Blog

Trust Me

Posted in Daniel Wein - The Solicitor April , 2012  16 Comments  Add your comment ›

Tell a Friend

Send this article to a friend by filling out the fields below:

 
 
Close »

Daniel Wein, Partner at Stace Hammond Barristers and Solicitors

Trust Me


You may or may not be aware that the Law Commission are currently undergoing a very detailed analysis of various elements of trust law in New Zealand. They are due to release their recommendations in respect to changes to trust law around mid – 2012 and these will be interesting reading. In December 2010 the Commission released a discussion paper looking at the use of family trusts in New Zealand, where there is one for every 18 people.


Some of the comments made in that paper provided an interesting analysis of the use of family trusts in New Zealand. The paper suggests that trusts were seen as something of a status symbol with many people motivated to establish one just because someone they knew had one.


In recent decades some of the reasons for establishing trusts seemed a little more obvious – In the 1950’s trusts were seen as a means to avoid paying estate (death) duty and other high taxes, in the 1970’s as “the obvious vehicle” to avoid matrimonial property having to be equally divided in the event of a divorce, and in 2000, when changes to the tax system increased the top rate of personal income tax to 39% while the tax rate for trusts remained at 33%. In addition, trusts were often used by applicants seeking the residential care subsidy, to reduce their assets in order to satisfy eligibility criteria for the benefit.


So, with the reduction in the personal tax rate, abolition of estate duty and developments in the Relationship Property area of law, why do people use trusts?


I suggest to you that avoiding exposure of ‘personal’ assets to creditors is definitely a common discussion question with clients, as is keeping property out of relationship asset pools. So, do trusts work to protect these assets?


Certainly case law is developing as a pretty powerful tool to suggest that if you are merely operating a trust as an extension of your self, and treating the assets as your own, the trust is likely to be considered by the Courts as a “sham”. Trust “busting” -as it is known- is forging ahead in leaps and bounds in the Courts where relationship property is at stake, with recent decisions providing that assets held in trust do not prevent them from being included in any relationship property division. When dealing with creditor remedies the Courts have plenty of scope to look into trust arrangements to determine whether the assets should be available. The role played by trustees is also increasingly under scrutiny, with case law defining the limits to which trustees can excuse themselves or limit their liability.


So, what to do?


Just in the same way that companies need to be run with resolutions, board meetings and making sure all the necessary paperwork is in place, trusts are no different. Always remember, if you had forgotten, that assets held in a trust are not yours…they belong to the trust fund, which is administered by the trustees of that trust. Trustees have to act in accordance with the Trustee Act 1956 and, of course, the terms of the trust deed that establishes the trust. When trustees deal with assets they need to do so by way of resolution of the trustees and their decisions need to be in accordance with the Act and trust deed.


If you are an independent trustee then you need to make sure you keep copies of trust documents and resolutions. You should require copies of annual accounts and bank statements, and transactional documents. Most independent trustees who are non professional don’t get paid anything to be an independent trustee and yet they take on a huge amount of risk.


All property and obligations are held in the name of the trustees as a trust does not have separate legal personality. What does this mean? Trustees (of a family trust) are personally liable for the debts of the trust. Often, a trust deed will allow the trustees to be indemnified from the assets of the trust. This is helpful to reduce personal liability, but only to the extent that the trust actually has sufficient assets, and I would suggest cash assets – as there is no use in having a fortune in shares in a small business (for example) that can’t be sold.


Shortly (hopefully) we will be able to report back to you with the likely changes in trust law. Until then, make sure if you are a trustee of a family trust that you are aware of what your obligations are to your beneficiaries, what your obligations are under the Act, and your parameters for action under the trust deed.

* this blog reflects the personal views of the writer and does not constitute legal advice, or the opinion of Stace Hammond.  

16 Comments  Add your comment ›

Kathryn said on 11/03 at 6:01pm

Hello...I am an independent trustee acting for my sister who is the Settlor and her 2 children as the beneficiaries. I do a lot of work for no payment...when will this situation change in law?! It is amazing that such duties and responsibilities should go unpaid..when I approached my sister as to the possibility of a small retainer she more or less told me that it was just too bad, so get over it...at the moment I would say that a trustee can only hope that at the end of a trust term (in this case in 7 years when the children turn 25) one would hope that the Settlor will see fit to make a one off 'thankyou' payment...that does not look likely in my case though! It really is an appaling arrangement and trusts should only be allowed to be formed if people managing them can be paid for work done. Do you think the law review will look at this issue?

VnYiAKrpBa said on 27/10 at 2:22pm

<a >click for source </a> order tramadol rx - buy tramadol 180

trisybearee said on 04/12 at 7:38am

<a >buy generic strattera</a> - <a >buy strattera 40 mg</a> , http://trustdrugsshop.com/strattera/ buy strattera 10 mg

seoidf said on 05/12 at 11:12pm

Stake executives are needed in total realms of the career zone. All plentiful company or corporation has at minimal united stake steward on personnel. As a fund curator, you'll be in price of sum the enterprise' pecuniary demands. and the essay writing service reviews also provided about the business and financiers. the finance manager also give good content about the blog and other essays.

drbrainpower said on 04/03 at 7:30pm

pharmacy tech training <a >wesbite </a> cheap online pharmacies mexico animal medicine <a >buy modafinil new zealand online </a> doctor veterinary medicine protocole du pharmacies <a >My Website </a> cmv pharmacy sam's pharmacy pensacola <a >buy modafinil movies online </a> university of toronto pharmacy program guangzhou hospitals chinese medicine <a >wesbite </a> pharmacy cetirizine east asian medicine practice before 1914 <a >modafinil price australia </a> behavioral medicine in wichita kansas bad medicine tribute band fom chicago <a >this site </a> medicine to stop getting cramps naturopathic food as medicine <a >cost of provigil online </a> uw school of medicine obstetrics giant food stores pharmacy <a > dispose of medicine az dr applebaum emergency medicine <a > asap pharmacy illinois

aaforbesman said on 11/03 at 8:33am

northeast pharmacy nh <a > lumigan vs latisse budget </a> compounding pharmacy los angeles greene family medicine in virginia <a > lumigan latisse problems </a> 24h pharmacy ottawa cholesterol medicine and liver <a > how to apply lumigan for eyelash growth eye </a> cbs news osteoporosis medicine apothecary marana az pharmacy <a > lumigan eyelash growth coupons </a> lovell drugstore aboriginal women and holistic medicine <a > lowest price for latisse </a> siox finder medicine news herbal medicine <a > lilash vs latisse review </a> lauren big medicine pharmacy student job london <a > lilash versus latisse try </a> kidney cleansing homopathetic medicine medicine purdue school veterinary <a > here </a> pet health pharmacy youngtown christus st francis cabrini pharmacy <a > http://ameblo.jp/latissespecials/entry-11782551094.html </a> medbrook pharmacy bridgeport wv discount pharmacy purchase zoloft <a > here </a> gastric empty nuclear medicine baltimore pharmacy's <a > gibson wilson pharmacy anabolic uk pharmacies steroids visa mastercard <a > ear drop medicine ireland socialized medicine <a > history of medicine in 1500 sears pharmacy oakpark journal <a > nursing vs natural medicine washington school of medicine secondary application <a > efimeral as a medicine chinese medicine recipes for inflamation <a > sports medicine in sonoma county herbal medicine for bi-poler syndrome <a > north haven pain medicine center southern sports medicine mississippi <a > pharmacy at medvolumes com nyberg pharmacy mo <a > pharmacy specialties sioux falls pharmacy drugs prescription care insurance member <a > bph treatments medicines

Tokbuito said on 28/03 at 7:51pm

nw088eff <a >kim kardashian sex tape stream</a> free kim kardashian sex tape ox7twihf n080nwmk <a >kim kardashian sex tape full video</a> kim kardashian sex tape tube mmeiqrxs http://kardashian24hr.com ksfnuse

tiedeinsots said on 07/04 at 2:08pm

6jlk5nq4 <a >instant approval payday loan</a> payday loan lender mvnxsf03 http://paydayloan93kod.org 2xuh2cxq <a >payday loan</a> payday loan yyjh01fu http://paydayloans365new.org

takBrotora said on 10/04 at 3:13pm

bvie3p8c <a >online casino black jack</a> best casino online 4gtqrfgk http://best1133freebonuscasino.com cp0jzzuo <a >offshore casino online</a> online casino bonuses uipull8s http://bestonline101casino.com

apperteda said on 10/04 at 4:36pm

3kybzjy7 <a >farrah abraham sex video</a> free farrah abraham sex tape bi4x1hht http://farrahvideo36.com agn65itz <a >paris hilton sex tape</a> new paris hilton sex tape 4fxswd21 http://parishiltonsexvid.net

obliliasnini said on 12/04 at 5:27am

i5gllztv <a >kim kardashian sex tape full</a> kim kardashian sex tape free lg2c1uyy http://kimkleak.com 9c96zjqd <a >life insurance quotes</a> life insurance quotes uk fnfbuqop http://insurancequotes36.co.uk

Wrerriniab said on 12/04 at 6:31pm

r3lvwsfy <a >nicki minaj sex tape exposed</a> nicki minaj sex tape pics ensti3t3 http://celebrityvideoz.info/nicki-leaked-16167 k1q5v42n <a >online life insurance quotes</a> life insurance qrgyvyqu http://lifeinsuranceq.co.uk

wewedgergy said on 14/04 at 1:59pm

scfed8k2 <a >full farrah abraham sex tape</a> farrah backdoor xhayiw54 http://farrahbackdoor.net 58exbzy7 <a >nicki minaj porn tape</a> nicki minaj porn 3wytpefh http://cherokeeroseranch.com

sdsdsdsd said on 15/04 at 11:44pm

The simplest way to politely turn away solicitors is obvious do not answer the door. Unfortunately, that is a lesson learned too late sometimes, as when you are expecting a friend or special delivery only to discover an uninvited guest at your door. So here is how to politely turn away solicitors when avoiding them is not an option. vitamincserum.co

erekkeymn said on 16/04 at 3:43pm

g7s0t6ip <a >tila tequila home sex tape</a> tila tequila sex tape full rk5a524q http://celebrityvideoz.info/tila-tequila-sex-tape-15557 7s75w92p <a >lindsay lohan sex tape porn</a> see lindsay lohan sex tape fovkao96 http://celebrityvideoz.info/lindsay-revealed-15397

vitamin c serum said on 17/04 at 10:13pm

Unexpected or unwanted calls can be disruptive to your daily activities. Here's how to stop annoying calls from someone trying to sell you something or take your political temperature for a supposedly impartial poll. Your number to companies and businesses or print your phone number on checks, unless it is necessary. In situations where you must give your phone number, ask them to not share it with other companies and telemarketers. vitamin c serum

Add Your Comment

 
(add email to receive notifications)
 

Why Choose Us?

  • Quick & easy application & 48 hr approvals
  • We are flexible, owner operated and we love small business
  • Supported by large international funds and able to fund at a competitive rate
  • Backed by the experience of Working Capital Solutions

Read more »

Request A Callback?

  • Submit the word you see below:


  • Your privacy is 100% guaranteed & secure.


About Us

My Business Finance is all about small business. Able to obtain flexible invoice finance and cash flow solutions, My Business Finance makes the application process simple and can have cash paid to your business account usually within 48 hours.

Read more »

Contact Details

Level11, 126 Vincent Street, Auckland

Phone 0800 386 382

Contact us »