Various legal documents need to be put in place when establishing a trust, including of course the Trust Deed. There are three main groups of parties involved. The Settlors are the persons who set up and transfer assets to the trust. The Trustees are the people who hold the legal ownership of the trust assets on behalf of the beneficiaries. The Beneficiaries hold the beneficial ownership in the trust assets and include, amongst others, yourselves, your children and grandchildren.
I also recommend that a Memorandum of Wishes is completed. This is not binding on the trustees, but sets out the manner in which you would like the trust to be administered and is a valuable guide for the trustees. It is an effective way of ensuring that on your deaths specific requests that you had in mind may be given effect to by the trustees.
Trusts are an invaluable asset protection tool and mechanism for preserving one’s weath.
Please contact Ian Mellett at Quay Law for more information, or if you have any further questions on Family Trusts and Asset Planning.
Ian Mellett BComm LLB H Dip Tax is a Barrister and Solicitor at Quay Law in Remuera, Auckland. This Auckland law firm provides services in Wills and Estate administration, Estate Planning, Family Trusts and Asset Protection, Relationship Property Agreements, as well as Conveyancing, Commercial, NZ Immigration and other areas of law. Phone number (09) 523-2408.
NEW ZEALAND LEGAL ARTICLE 2 :
22 March 2011
New Zealand Trust Law under review by Ian Mellett of Quay Law, Auckland, NZ
Based on current records, New Zealand has one of the highest numbers of trusts per head of population in comparison to other countries. It is estimated that there are at least 237,500 trusts in New Zealand but this figure could be as high as 400,000.
The Law Commission has been asked to review the Trustee Act 1956 and trust law generally. The Commission plans to tackle the review in 3 stages:
- Stage 1 will look at the Trustee Act 1956, the Perpetuities Act 1964 and trust law generally. The first paper was released in November 2010 and focused on the history of trusts. The second paper was released in December 2010 and focused on the uses of family trusts in New Zealand. This paper included the potential concerns surrounding the current use of trusts.
- Stage 2 will consider the Charitable Trusts Act 1957.
- Stage 3 will consider the trustee companies legislation.
There is an intention to abolish gift duty with effect from 1 October 2011. Whilst this legislation is yet to be passed, it seems that from this date gift duty will no longer be a relevant factor for people settling trusts. The result of this proposed legislation will be an easier movement / transfer of assets into trusts.