The Law Commission feels a new framework is needed to provide a clear and robust approach for trusts in the 21st Century. They are undertaking a 3 part review of trust law in New Zealand and presented the first report to Parliament on 11 September 2013.
The Law Commission report focuses on the essential nature of trusts and recommends the introduction of a new Trusts Act (‘proposed New Act’) to replace the Trustee Act 1956 (‘current Act’), which the Commission believes has become outdated. A selection of the recommendations in the report are summarised below:
While many of the recommendations simply clarify the existing law, the Commission recognises the new regime will widely impact the estimated 300,000 – 500,000 trusts currently in New Zealand.
Whether the Government approves the report remains to be seen. In the meantime, the Commission will continue with the final 2 stages of their review, which relate to charitable trusts and corporate trustees. For a full list of the proposed changes, refer to the Commission’s website:www.lawcom.govt.nz/our-publications.