The Trusts Bill was introduced to Parliament on 1 August 2017.
The policy objectives of the Trusts Bill include providing “clear, simple, and accessible trust law”. The Trusts Bill sets out important established trust law principles but does not codify New Zealand’s trust law. The inherent jurisdiction of the High Court is expressly preserved and current case law will continue to apply.
A significant change from the draft Trusts Bill is that the provisions relating to trustee’s obligations to disclose information to beneficiaries are now more robust. A presumption that trustees must make basic trust information available to every beneficiary or their representative is proposed.
The basic trust information is details of:
• the fact that a person is a beneficiary of the trust
• the name and contact details of the trustee
• appointments, removals, and retirement of trustees
• the right of the beneficiary to request a copy of the terms of the trust or trust information
Trust information is broadly defined to mean any information regarding the terms of the trust, the administration of the trust, or the trust property but does not include reasons for trustees’ decisions.
Settlors and trustees will need to carefully consider the appropriateness of broad classes of beneficiaries and the practical implications of positive disclosure obligations. It is noted that the disclosure obligations in the Trusts Bill are greater than under the present common law following the Supreme Court decision in Erceg v Erceg.
The disclosure provisions will not apply to charitable trusts.
If enacted in its current form the Trusts Bill will come into force 18 months after the date on which it receives Royal assent. This is a longer transition than that provided for in the draft Bill.