Using a trust to protect your assets
You've put in the hard work and you deserve to be protected. The best way to do this is to set up an asset preservation trust to help protect your assets should a creditor, or relationship breakdown, threaten.
Trusts can be useful tools to assist with the protection of your assets in many scenarios, such as:
- when you are starting a new business, or if your business is expanding,
- if you are in a high-risk job (such as a lawyer or a doctor),
- as a professional director,
- for blended families and to assist with relationship property, and
- to help with succession planning.
Some of the most important things about setting up a trust (other than deciding on the name) are ensuring it is set up correctly, that your trust deed suits your needs, and that you have a good understanding of your duties as a trustee. We can help with all aspects of setting up a trust to protect assets and more.
Trusts Act 2019
The Trusts Act 2019 is the most significant change to Trust Law in 70 years.
Some of the key provisions of the Act are below and detailed further in this NZ Law Society piece:
- Application and guiding principles - the Trusts Act will apply to all express trusts that are governed by New Zealand law, including those created before the Act came into being.
- Mandatory and default trustee duties - the Trusts Act specifies the core trustee duties that were already part of the Act, and additionally classifies the duties as 'mandatory' or 'default'.
- Special trust advisers/delegates and nominees - an option opened up by the Trusts Act is the ability to appoint a 'special trust adviser' to advise the trust.
- Disclosure of Information - the Trusts Act creates a presumption that a trustee must make 'basic trust information' available to every beneficiary and 'trust information' available to beneficiaries who request it.
- Exemption and indemnity clauses - the Act makes it clear that trust dees must not limit a trustee's liability or provide an indemnity for dishonesty, wilful misconduct or gross negligence.
- Appointment and removal of trustees - the statutory powers for appointment and removal of trustees have been adapted to remove the need to apply to the court.
- Abolition of the rules against perpetuities and accumulations.
Click here to download a copy of our Trust Act 2019 information booklet.
To find out more about the Trusts Act 2019 or to discuss the implications of the Act on your trust, contact one of our trust specialists.