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Trusts update: What do you need to disclose to beneficiaries?

Many New Zealanders have set up trusts over the past few decades. It’s not uncommon for beneficiaries to be ignorant of even the most basic information relating to the nature and operation of the trust.

The status quo has now changed as a result of the Trusts Act 2019, which came into effect on 30 January 2021.

Disclosure is the new norm.

Trustees are now required to make disclosure of the basic trust information to beneficiaries. Here are the key facts that need to be disclosed:

  • The fact that a person is a beneficiary of the trust.
  • The names and contact details of trustees.
  • Any changes of trustees
  • A beneficiary has the right to request a copy of the terms of the trust or trust information.

Indecision or hesitation could lead to the Court becoming involved.

The disclosure requirements will cause some trustees to anguish about whether the basic trust information should be provided to all beneficiaries, or only some. If there is indecision for too long, there can be some negative impacts.

If no beneficiary receives any trust information, the trustees must apply to the Court for directions. However, that obligation to apply to the Court can be overcome if the period during which no beneficiary has any trust information is less than 12 months.

A deadline for disclosure is approaching.

30 January 2022 is not far away. We can assist you with completing the necessary documents so that you can yourself make disclosure of the basic trust information to beneficiaries – without the obligation to apply to the Court.

There still time to get your lawyer to review your trust to check if it’s possible to reduce the number or class of beneficiaries that you have to make disclosure to.

Get in touch with us and we can assist.