Ageing Trustees

Know when to walk away

When Barack Obama was US president, he made an historic visit to Africa. One of the messages he repeated was that, under the US Constitution, he could only be president for eight years and this time limit is generally a good thing.

Obama was, of course, making an indirect reference to the tendency in some African countries for leaders to have themselves declared to be president for life. This, in Obama’s view, was not only unhealthy but also an excessive burden for one person to bear for too long.

Something similar could be said of some trustees. No one should want to be trustee for life. It’s useful for trustees to think about a succession plan: which trustees should we expect to retire or be replaced and who are the likely replacement trustees? Sometimes, likely future trustees are asked to sit in on trustee meetings to understand how the trust runs. (We have an article about the process for retiring trustees here.)

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Trusts Bill

Some key proposals

In late 2013, the Law Commission completed a report recommending that a new Trusts Act replace the Trustee Act 1956. The public consultation phase began last December with the release of the exposure draft Bill. It is intended that the new legislation will be the primary source of trust law in New Zealand. We outline below some key proposals.

trustsbill

Definition

Most trusts in New Zealand are established with a written trust deed or other document such as a Will. These are known as ‘express trusts.’ The Bill only applies to express trusts. Characteristics of express trusts are defined in the Bill as:

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Parallel Trusts: Could be the best option for you

With the growth of multiple relationships and blended families many couples are having to consider ways to ringfence assets and protect inheritances. One option is to establish parallel trusts – so you each have your own trust for your share of the assets.

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The latest Trust eSpeaking

The latest Trust eSpeaking – hot off the press

Trust eSpeaking

In this issue:

  • Division of Trust Assets on Separation: Family Proceedings Act can apply
  • What Type of Trust do you Have? Important tax implications
  • Advisory Trustees: all care and not the responsibility

The next issue of Trust eSpeaking will be published in September.