What is the Trusts Act 2019?

The Trusts Act 2019 is the principal New Zealand statute governing express trusts. It came into force on 30 January 2021 and applies to all express trusts (including family trusts), whether settled before or after that date. The full text is published on the New Zealand legislation register: Trusts Act 2019.

What it replaced

The Act replaced the Trustee Act 1956, a piece of legislation that had become difficult to apply to modern family-trust practice. The 1956 Act gave little guidance on what trustees actually had to do day-to-day; case law had filled the gap, but inconsistently. The 2019 Act puts trustee duties on a statutory footing and modernises the rules around perpetuity, trustee removal, and beneficiary information.

Mandatory duties

Sections 23 to 27 set out five mandatory duties that every trustee must perform and that the trust deed cannot exclude or modify:

1. Know the terms of the trust
2. Act in accordance with the terms of the trust
3. Act honestly and in good faith
4. Act for the benefit of the beneficiaries (or to further the permitted purpose)
5. Exercise powers for a proper purpose

If a trust deed purports to contract out of any of these, the relevant clause is void to the extent of the inconsistency.

Default duties

Sections 29 to 38 set out ten default duties — general duty of care, investment duty, duty not to profit, duty to act unanimously, and so on. These apply unless the trust deed expressly modifies or excludes them. Most older trust deeds were drafted before the Act and do not address the default duties directly; a deed review is the cleanest way to confirm which defaults still apply.

Beneficiary information

Sections 51 to 55 introduce a presumption that basic trust information (the existence of the trust, the identity of the trustees, and the beneficiary’s right to ask for further information) must be made available to every beneficiary. Trustees can decide not to disclose if certain listed factors apply, but they must positively turn their minds to the question.

Perpetuity period

Section 16 lifts the maximum trust duration from 80 years to 125 years, with retrospective effect for trusts that have not yet vested. Existing trusts can be extended by deed of variation provided the deed permits it.

Record-keeping

Section 45 requires every trustee to hold a core set of trust documents — the trust deed, any variations, records of trust property, records of decisions, and accounts. At least one trustee must hold the complete set.

What it means for existing trusts

Most trusts settled before 2021 are still effective and do not need to be wound up. They do, however, benefit from a one-off compliance review to confirm the deed works with the new statutory regime, default duties have been considered, and the trustee book is in order.

For a practical walkthrough of how the Act affects existing trusts, see our trust review guide and our companion article on running a family trust.

Want help?

If your trust was settled before 2021 and has not been reviewed, book a free consultation and we will assess what (if anything) needs to be updated.