03 377 4421

Having a Trust & Being a Trustee Can be Complex & Take Time to Manage

Trust Administration Service

A trust can be a valuable way of protecting assets held for the benefit of others.  Kannangara Thomson recognises that clients may need help with meeting their trust obligations and with the duties of being a trustee.

Duties and obligations for trustees are increasing and it can be difficult to keep up to date with what is needed.  We have a dedicated team who offer trust administration services to assist in the effective management of trusts.

We can help you by:

  • Maintaining the records of the trust
  • Reminding trustees of significant dates
  • Liaising with the trust’s accountants
  • Preparing appropriate minutes and obtaining signatures of trustees when required
  • Circulating questionnaires to capture major decisions
  • Arranging and attending annual meetings of trustees, preparing agenda, minutes, and reporting to trustees
  • Carrying out a review of main aspects of the trust
  • Being available to discuss any matter relating to the trust
  • Preparing an annual trust management report summarising the essential elements of the Trust
  • Maintaining a current register of trustees, beneficiaries, and trust assets
  • Reviewing financial statements
  • Ensuring that Government legislation and compliance requirements are met.

Peace of Mind

  • Trustees are aware of their duties and the liability of trustees is mitigated by effective trust administration.
  • Regular trust reviews will ensure the trust is well run and meets its purpose.

Saving you Time

  • Trust transparency and good management will reduce the chance of any legal issues in the future.
  • We complete the trust administration

Independent Trustee

Trustees make the decisions for the trust.  Decisions made need to be accountable.  Being a trustee comes with a great deal of responsibility, so we recommend that you choose your trustees wisely.

We do, on a limited basis, offer our Trustee company as an independent trustee when there are no other options.  Under that service, we are actively involved in all decision making, reviewing, and signing documentation, answering trust queries, and reviewing the trust at each annual meeting.  If we act as an independent, it is a condition of us agreeing to do so that the trust comes under our annual trust management service.

Specialist Trust Work

Kannangara Thomson will work with clients to ensure their trust coincides with their estate planning, in particular:

  • Your will can leave your personal assets to the trust for distribution according to the trust deed.
  • Your will can also appoint someone to have power of appointment of trustees once you pass away.
  • Enduring Powers of Attorney should be in place in case you become mentally incapable.
  • A Memorandum of Wishes give trustees direction as to your wishes for the distribution of the trust assets once you have passed away.

We work closely with your accountant to ensure affairs are tidy and up today.

Top Tips

  • Think carefully about who the trustees will be, as trustees have a great responsibility.
  • All Trust decisions need to be documented for transparency and accountability to beneficiaries.
  • All decisions of the trustees must be unanimous.
  • Have an independent trustee in your trust to ensure independence when decision making.

What You Need to Know About the Trusts Act 2019

What You Need to Know About the Trusts Act 2019

The Trusts Act 2019 came into force on 30 January 2021.  It replaces the Trustee Act 1956 and applies to all existing and future trusts in New Zealand.

The Act is intended to make trust law simpler, more transparent, and more accessible to the general public.

“How does this affect me as a trustee or beneficiary of a Trust?”

  • As a trustee there are greater compliance requirements for the trust and all trustees are required to contact beneficiaries and supply them with basic trust information.
  • As a beneficiary, the trustees of any trust you are a beneficiary of are required to notify you that you are a beneficiary and provide you with basic trust information.

A summary of the key provisions in the Trusts Act 2019 are:

  1. The life of a trust is extended to 125 years, it was previously limited to 80 years.
  1. There are compulsory duties for trustees, which cannot be changed. These are:
    • A trustee must know the terms of the trust.
    • A trustee must act in accordance with the terms of the trust.
    • A trustee must act honestly and in good faith.
    • A trustee must deal with trust property for the benefit of the beneficiaries.
    • A trustee must exercise the trustee’s powers for a proper purpose.
  1. There are optional duties for trustees, which can be modified or excluded in the trust deed. These are:
    • A trustee must exercise the care and skill in administering a trust that is reasonable in the circumstances.
    • When investing, a trustee must exercise the care and skill that a prudent person of business would
    • exercise in managing the affairs of others.
    • A trustee must not exercise a power directly or indirectly for the trustee’s own benefit.
    • A trustee must consider actively and regularly whether the trustee should be exercising one or more of the trustee’s powers.
    • A trustee must not bind or commit trustees to a future exercise or non-exercise of a discretion.
    • A trustee must avoid a conflict between the interests of the trustee and the interests of the beneficiaries.
    • A trustee must act impartially in relation to the beneficiaries and must not be unfairly partial.

o A trustee must not make a profit from the trusteeship of a trust.

  • A trustee must not take any reward for acting as a trustee, but this does not affect the right of a trustee to be reimbursed for the trustee’s legitimate expenses and disbursements in acting as a trustee.
  • If there is more than one trustee, the trustees must act unanimously.
  1. If any of the optional duties for trustees are changed in the trust deed, the advisor must point this out to the settlors.
  2. There is a limit on trustee exemption and indemnity clauses. The terms of a trust deed must not limit or exclude a trustee’s liability for any breach of trust arising from the trustee’s dishonesty, willful misconduct, or gross negligence.
  3. Trustees must keep all trust information and documents stored for the life of the trust.
  1. Trustees must make available to every beneficiary or representative of a beneficiary the basic information relating to the trust, this is:
    • the fact that a person is a beneficiary of the trust; and
    • the name and contact details of the trustees; and
    • the occurrence of, and details of, each appointment, removal, and retirement of a trustee as it occurs; and
    • the right of the beneficiary to request a copy of the terms of the trust or trust information.
  1. There is a presumption that a trustee must give a beneficiary or the representative of a beneficiary the trust information that person has requested within a reasonable time unless certain provisions apply.
  2. There are updated requirements for the compulsory removal of a trustee. The person who has the power to appoint and remove trustees must use that power to remove a trustee if that trustee loses capacity and there is no other person able to affect the removal.

If you have any questions or concerns about how the Trusts Act 2019 might affect your Trust, please contact us on (03) 3774421 or email us at email@ktlaw.co.nz

Family Trusts & Asset Protection

No matter what your financial worth is, a lot of hard work has gone into building your asset base (big or small).  There is an element of risk behind every major personal or financial decision that you make, for example beginning a relationship, starting a business, or buying a house.

This is a time to review your risks and look at how well you are protected.  Don’t leave it too late.

Family Trusts – Asset Protection

One of the best ways to protect yourself and to provide for your family’s future is through a family trust.  This will protect your assets and provide for your interests and give security to your loved ones.  A family trust ensures that your assets are distributed in accordance with your wishes and requirements.

A trust also provides protection from creditors and ex-partners.  However, a badly set up trust can create a whole lot of problems.  Seek the best legal advice when setting up a Trust to avoid having these problems.  Trusts should be reviewed on an annual basis to ensure that your needs are still being met and that you meet all the requirements of the Trusts Act 2019 which came into force on 30 January 2021.

Family Trust and Asset Advice

At Kannangara Thomson we can office you the best advice possible and the most suitable way to protect your assets and to help you do this. 

Please contact us on 03 377 4421 or email on email@ktlaw.co.nz to be put through to our expert team.

Brent Selwyn

Kahu Simmonds

Occupying Right Agreements

Retirement Lifestyle villages have a number of different ways that they grant rights of occupation of property to their residents. These are all bound by some government restrictions. Most villages use Occupation Right Agreements. It is important to understand what you are entering into and the specialist elder law Team at Kannangara Thomson can assist you.

An Occupation Right Agreement will sometimes also be referred to as a Licence to Occupy or an Occupation Licence. The main difference between these and regular property ownership is that you only have a personal right to occupy the property. Instead of owning the property that you live in, you sign a contract which grants you the right to live there until a future specified event such as your death, or sooner if you have a need for a higher level of care.

There are a few restrictions with Occupation Right Agreements. You are not able to mortgage the property, transfer the right to occupy or sell the property. The right to occupy must be personal to the occupants and the occupation right agreement is generally always required to be in the personal names of the occupant(s).

Each village will have its own set of obligations and these usually include things like a code ofconduct, parking restrictions, your insurance obligations, who is responsible for repairs and maintenance etc. Most occupation right agreements will generally include the ability for friends or relatives to stay with you, usually for a specified maximum duration. You may also be able to make modifications or alterations to your unit in some circumstances and you may be able to keep a pet.

A regular service fee will also be payable to the village. The amount of the fee will depend on the level of care and/or services that you require. There may also be requirements that you must fulfil before you can enter into an Occupation Right Agreement. One common requirement is that each occupants signing the occupation right agreement must have a valid Will in place and Enduring Powers of Attorney. This is partially why it is legally required by Government to have a legal professional advise you and to be present when signing any Occupation Right Agreements.

We have a fantastic team at Kannangara Thomson ready and willing to help you. Click here to view our Retirement Planning team

You can also download our free Guide to Elder Care Booklet here

WINZ Rest Home Subsidies

This is a complex and specialist area covering the circumstances in which individuals can qualify for assistance from the government to pay for the not inconsiderable rest home fees that can be involved where a person is living in a rest home or indeed receiving constant hospital care in the hospital wing of a rest home.

While there are existing policies which determine eligibility, one has to have an open mind to the fact that with the ageing population and the increased number of people going into home or hospital care there are going to be financial issues of affordability in the future which have not yet been fully canvassed. Therefore, while this article endeavours to state the government policies, these are only the policies in existence at this point in time and will almost certainly change in the future.

People who:
 Don’t have a partner, or
 Have a partner who is in long term residential care.
– Must have combined total assets valued at $239,930 or less to qualify.

People who:
 Have a partner who is not in care can choose a threshold of:
– Combined total assets of $131,391 not including the value of their house and car, or
– Combined total assets of $239,930 which will include the value of their house and car.

Please note: asset thresholds are adjusted at 1 July each year with the next adjustment due 1 July 2022 and that the house is only exempt from the financial means assessment when it is the principal place of residence of the partner who is not in care or there is a dependent child.

As a person cannot apply until they meet the criteria tests mentioned above, it is important to keep a close eye on the asset total in either category to ensure that an application is made at the correct time and the Funeral Trust established if considered appropriate. If the application is not made soon enough then the WINZ subsidy cannot be backdated. So for example, if it was left until the assets in the second case totalled $100,000.00 and even though the threshold was then (say) $200,000, WINZ would only start paying from the point that the application had been made; they would not make any compensation for the money that had been spent between $200,000.00 and $100,000.00.

WINZ are very well informed about the role of trusts in the lives of many people applying for a rest home subsidy. They will scrutinise very carefully the history of any trust including in particular the reasons for setting up the trust. If they consider the reasons were valid then the trust assets may be excluded from personal assets but WINZ may still look to any income that the trust is earning as a contribution towards rest home payments. This is very important to understand as many people set up trusts because it was then customary to do so and they may not now be the panacea they were initially thought to be in this context.

What are Enduring Powers of Attorney?

Have you wondered what happens when you can no longer manage your affairs?

The Protection of Personal and Property Rights Act 1988 allows you to appoint people you trust to manage your affairs under Enduring Powers of Attorney. These documents come in two forms, one for personal care and welfare and the second for property matters.

In relation to your personal care and welfare, unless ordered by the court, and even then, only in special circumstances, you can only appoint one attorney, although you are able to appoint a first successor attorney and if you require, even a second successor attorney. Where an Enduring Power of Attorney in relation to property is concerned, you may have more than one attorney and once again, you can appoint a successor or successors. An enduring power of attorney in relation to property can also be created so that it also acts as a general power of attorney and can be used by your attorney(s) while you still have mental capacity. Or, you can choose to set it up so that it only comes into effect if you lose mental capacity.

However, an Enduring Power of Attorney in relation to personal care and welfare can only be activated when you have lost mental capacity and are ‘wholly incapable of managing your own personal welfare.’ You are presumed to be competent unless an assessment by a registered medical practitioner or specialist geriatrician shows otherwise. Significant changes were made with the passing of the Protection of Personal Rights and Property Rights Amendment Act 2007 and then in 2016 new standardised forms were introduced.

Changes introduced in 2007 included:

  • The ability to appoint a Successor Attorney, in the event that the original attorney is unwilling or unable to act.
  • The ability to authorise your attorney to act on certain specified matters or all matters.
  • The abillity to require your attorney to consult with or provide information to specified persons.
  • The power to authorise your attorney to ask the court to make or amend your Will.

If you wish to change your attorney or have concerns about the person or persons you have appointed as your attorney, while you have mental capacity, you can revoke the attorney’s appointment. If you have lost mental capacity and a family member or friends are concerned about an attorney’s actions, the only redress is through the courts. If you lose mental capacity and you do not have Enduring Powers of Attorney in place, an application can be made to the Family Court for someone to be appointed as your Welfare Guardian and/or your Property Manager. This is a much more expensive process, both in time and cost. The appointment of a welfare Guardian and/or property manager by the court would usually be for  a limited duration such as 3 years, following which application must be made to the court for the
orders to be renewed.

Enduring Powers of Attorney are a very important estate planning tool and we recommend that everyone should have these valuable documents in place, regardless of age, so that in the event of an unforeseen loss of capacity, your affairs can be managed by someone you trust.

By Brent Selwyn of Kannangara Thomson

Kannangara Thomson’s specialist Elder Care team deal with all aspects of senior law.