Family Trust Administration and Review Services

Trust administration is the ongoing management and compliance of your family trust. Under the Trusts Act 2019, trustees must hold annual meetings, keep proper records, make decisions, and provide information to beneficiaries. Proper administration ensures your trust remains legally valid, protects assets effectively, and complies with IRD and legal requirements. Without it, your trust could lose its asset protection benefits.

Basic administration costs $800-$1,000 per year and covers essential compliance: annual trust minutes, resolutions, basic record-keeping, and IRD filing support. Full-service administration costs $1,500-$2,500 per year and includes everything in basic plus gifting program management, financial statements, asset register updates, and ongoing trustee advisory support. Cost depends on trust complexity and services needed.

Poor trust administration can result in: loss of asset protection (courts may disregard the trust), IRD penalties for non-compliance, beneficiary disputes due to lack of documentation, challenges to trust validity, and potential personal liability for trustees. The Trusts Act 2019 requires active maintenance - trusts cannot simply be left to 'sit' without ongoing administration.

All trusts established before January 2021 should be reviewed for Trusts Act 2019 compliance. Key changes include mandatory trustee duties, enhanced beneficiary rights, stricter record-keeping, and clearer trust administration rules. While the Act doesn't require updating existing deeds, many old deeds have provisions inconsistent with current law or don't address new requirements. A review ensures your trust operates effectively under current legislation.

Trustees must: know the terms of the trust deed, act in accordance with those terms, act honestly and in good faith, act for the benefit of beneficiaries, exercise powers for proper purposes, exercise care and skill of a reasonable person, not profit from being trustee (unless authorized), act unanimously (unless deed allows otherwise), and keep trust property separate from personal assets. Breaching these duties can result in personal liability.

Trustees should hold at least one formal meeting annually and record minutes of all decisions. Best practice is annual meetings to review trust affairs, discuss distributions, approve accounts, and document trustee decisions. Minutes provide legal evidence of proper trust governance and are essential for IRD compliance, beneficiary reporting, and defending against challenges to trust decisions.

A gifting program is used when you transfer mortgaged property to a trust. You can't gift debt, so the property is initially sold to the trust, creating a debt owed to you. This debt is then gradually forgiven (gifted) over time, typically $27,000 per year per person to minimize tax implications. Proper documentation of each gift is essential. Most home transfers to trusts require a gifting program.

While legally possible, DIY trust administration is risky. The Trusts Act 2019 imposes significant duties and compliance requirements. Mistakes can invalidate the trust, result in IRD penalties, or create personal trustee liability. Professional administration ensures compliance, proper documentation, and effective asset protection. The cost is far less than the risk of getting it wrong.