Justice Minister Amy Adams has released a consultation draft Trusts Bill which would restate and reform New Zealand trust law.
The bill would
- Set out the core principles of the law relating to trusts.
- Provide for default administrative rules for express trusts.
- Provide for mechanisms to resolve trust-related disputes.
- Enhance access to the law of trusts.
The 151-clause Bill says it is not an exhaustive code of the law relating to trusts, and it is informed by and complements the rules of common law and equity relating to trusts, except where specified or where those rules are inconsistent with the provisions of the Bill.
Ms Adams says trusts play an important role in New Zealand, with between 300,000 and 500,000 trusts operating today. An estimated 15% of private houses are held in a trust.
“Our 60-year old trust law is complex and hard to navigate, partly because it is scattered across the Trustee Act 1956 and a variety of decisions made by courts over many years. That’s why in 2009, the Government asked the Law Commission to have a look at how the laws could be modernised and made clearer," she says.
“Given their importance to our society and economy, trust law should be simple to understand so that families and businesses can manage their affairs with confidence.”
Ms Adams says the proposed reforms are largely based on recommendations for modernising and clarifying trust law made by the Law Commission in 2013. They also reflect advice from a reference group of experts she appointed in 2015, who considered the Law Commission’s recommendations and provided valuable input into refining them.
The Bill adopts 48 of the Law Commission's 51 recommendations.
A Ministry of Justice document, A New Trusts Act for New Zealand: Exposure Draft of the Trusts Bill, provides an overview of the new legislation. It states that the intention is that the Bill will not require existing trust deeds to be changed "because the Bill largely restates the existing law".
The document includes questions to help inform feedback on the new legislation. The ministry is seeking feedback before 5pm, Wednesday, 21 December 2016.
It says that after the consultation period, it will analyse the submissions and report to the Justice Minister. The Justice Minister may then seek Cabinet’s agreement to introduce the Bill to Parliament. It is expected that a final version of the Bill will be introduced to Parliament in 2017.