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Prepare for Changes in Trusts.. continued

This needs to be fixed by 30th January 2021, or your trust will be in breach of the Act.

Trustees will be obliged to give "basic trust information" to every beneficiary. This is
defined as:
the fact that the person is a beneficiary of the trust;

name and contact details of the trustees;
details of any retirements and appointments of trustees, plus updated contact information

for those trustees;
the fact that the beneficiary can request a copy of the terms of the trust or trust
information.

Things to consider:

To decide whether or not to give the beneficiary copies of trust documents and more
detailed information, the trustees must consider these questions:

Whats the likelihood of the beneficiary receiving trust property in the future?
Is the information subject to personal or commercial confidentially?
At the time the trust was set up, did the settlor intend the beneficiaries to be given

information?
The age and circumstances of each beneficiary;

what will be the effect on the beneficiary of receiving the information?
How will the trustees, other beneficiaries and third parties be affected by receiving the
information?

Will relationships within the family be affected?

Trustees might not want beneficiaries to even have a copy of the trust deed as they can
then see who the other beneficiaries are (or which family members have been left out).
This could cause conflict. If beneficiaries request financial statements they can become

aware of the value of the trust fund. This could put pressure on trustees to make a
distribution in their favour.

There is a change in dispute resolutions:
In the past, disputes had to be decided by the High Court, but it's now possible for

alternative dispute resolution and arbitration to be used to settle issues.
Trustees can also now be liable for gross negligence under the Act. They can't contract out

of this risk.

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T E A M G R A N T H A M M C G E H A N continued..
Life Property

Chris Grantham 0274 960 959 c.grantham@barfoot.co.nz
Karen McGehan 027 296 1449 k.mcgehan@barfoot.co.nz