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EstatePlanning

Over the fence

Employment Law, Government & Policy, Rural & Agricultural Law, Succession Planning, Trusts & Asset Planning, Wills & Estates
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Biosecurity overhaul

In July 2025, the Ministry of Primary Industries released its proposed ‘Biosecurity System Action Plan.’ It is intended to guide new legislation to amend the Biosecurity Act 1993, and to overhaul current biosecurity regimes to improve process, obligations and rights. This will impact importing/exporting, practices on farm and government accessibility to farms.

The action plan is presented in two tranches. The first focuses on immediate priorities – clarifying roles, modernising processes and providing training tools. The second tranche will build on successful initiatives, consider social and cultural impacts and develop long term resolutions. Significant progress on both tranches by 2030 is proposed.

Key proposed amendments following submissions and consultation include:

  • Placing greater decision-making discretion with regional councils and management agencies – including the ability to create exemptions, issue permits for pests and produce small scale management plans
  • Increasing and introducing new penalties, including for obstructing a lawful search
  • The ability to grant one-off or ad hoc permits for imported goods, and
  • Removing the need for the current exemption for regional councils to enter private land to manage pests.

A draft bill is anticipated to be presented to Parliament in late 2026.

To read more on the Biosecurity System Action Plan, the steering group workshops and the proposed next steps, click here.

 

Employee v contractor

On 21 February 2026, a new ‘gateway test’ was introduced to determine whether an individual is an employee or a contractor in terms of employment law. The gateway test does not apply retrospectively.

Gateway test: An individual is a contractor if they meet all the gateway test criteria. These are:

  • There must be a written agreement stating they are an independent contractor or are not an employee
  • No restriction from working for others (except while undertaking agreed work)
  • They are not required to work at a specified time/period OR they can subcontract the work, subject to legally required or justifiable vetting
  • Additional future work can be declined without the arrangement being terminated, and
  • There has been a reasonable opportunity to seek independent advice before entering into the arrangement.

If all criteria are satisfied, the individual is a contractor. If any of the criteria is not met or for claims brought prior to 21 February 2026 the common law test (below) applies.

The four factors below are considered together to determine whether an individual is a contractor:

  1. Intention – what did the parties intend the relationship to be? Consider entitlements received – for example, contractors are not entitled to holiday pay.
  2. Control v independence – high employer control over hours, work and methods may be indicative of an employer/employee relationship
  3. Integration – is the role fundamental to an employer’s business and continuous in nature, and
  4. Fundamental/economic reality – does the economic reality reflect a person in business on their own account? Consider fee structure, tax obligations, ability for the individual to profit and who bears financial risk.

The distinction between an employee and contractor is highly relevant for the rural sector as you may have both contractors (such as sharemilkers and contract milkers) and employees (farm hands, managers, etc) working on your property.

 

Wills and EPAs: essential for rural sector

For people who are responsible for farms and other major assets, it is important to ensure you have a current will and Enduring Powers of Attorney (EPAs). If you don’t have these and you die unexpectedly, lose mental capacity, or are unable to attend to your personal affairs for a period, it could lead to not only farming operations being disrupted, but also family uncertainty and having to spend time and money on sorting things out.

Will: Your will sets out your instructions about the distribution of your property to your family after you die. Even if you have a will, it is good practice to regularly review it, so it reflects your current situation and wishes.

If you don’t have a will, there is legislation[1] that decides how your estate is divided up; this arrangement may not be what you would wish. To prevent this, it’s optimal (and much easier) to ensure you have a valid will that reflects your wishes. Your family will thank you for it.

EPA: An EPA is a legal document that allows a trusted person (your attorney) to manage your affairs and personal care. There are two forms of EPA – one covering property affairs and the other about your personal wellbeing. An EPA for personal care only applies if you lose mental capacity, while an EPA for property can also apply while you have capacity.

For a property EPA, your attorney could be a trusted friend or relative, or you could appoint a trustee company to manage your property matters.

For a personal care and welfare EPA, you can only appoint a person as your attorney.

We can help you set up EPAs and a will or, if you already have them, review them so they reflect your current situation.

[1] Administration Act 1969.

 

 

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Content Copyright © NZ LAW Limited, 2026.    Editor: Adrienne Olsen.       E-mail: [email protected]      Ph: 029 286 3650

Trustee decision-making

Estate Planning, Trust Law, Trustee Duties, Wealth & Asset Planning, Wills & Succession
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How much weight should settlors’ directions carry?

It is estimated that there are between 300,000 to 500,000 trusts in New Zealand, and it is often said that we have one of the highest numbers of trusts per capita in the world. Although the reasons for having a trust are not quite as compelling as they used to be, trusts remain a large part of the legal and asset planning landscape. Trusts arise in many contexts including property ownership, investments, relationship property, insolvency and estates – to name a few.

We explore some of the interplay between settlors and trustees of a trust, particularly in relation to directions given by the settlors to trustees. It is very common for settlors to provide a form of guidance to trustees as to how the trust should be administered. However, must trustees follow the settlor’s directions? Should they follow those directions? What effect, if any, do a settlor’s wishes have on the trustees’ administration of the trust?

 

Operation of a trust

It is useful to begin with a reminder of the core mechanics of a trust. When assets are settled on a trust, they are transferred from the ownership of the settlors to the trustees. The trustees manage those assets for the benefit of the trust beneficiaries, and in accordance with the purpose and terms of the trust.

A settlor can also act as a trustee, but trustees must exercise their powers independently and in accordance with their duties to the beneficiaries. This is often achieved by having an independent trustee. The role of an independent trustee is becoming increasingly important and a lack of separation between the settlors, trustees and beneficiaries may undermine the trust’s purpose and leave it vulnerable to challenge.

It is for this reason that a settlor may choose to give written directions to the trustees about how the trust’s assets should be managed, how various beneficiaries should be treated, how the assets should be distributed and when that distribution should happen.

These directions take various forms but are often referred to as a ‘letter of wishes’ or a ‘memorandum of guidance.’ They are typically separate from the trust deed and kept with the core documents of the trust. Settlors can update these documents over time and they are often referred to or repeated in the settlor’s will. It is common for these directions to take effect on the settlor’s death or incapacity.

 

Effect of settlor guidance in trustee decisions

Guidance of this sort is not legally binding on trustees, but it is still an important consideration. As discussed above, the role of a trustee is to administer the trust in the best interests of the beneficiaries. A trustee is not an agent – nor puppet – of the settlor.

Trustees must exercise their own independent judgement when making decisions about the administration of the trust. They must consider all relevant factors. A settlor’s expressed wishes are one such factor, provided those wishes are consistent with the purposes and terms of the trust.

There is some authority in case law to suggest that this guidance is a mandatory consideration for trustees,[1] but it is clear that – as a minimum – trustees should read and understand the document. The Court of Appeal stated in the Chambers case, ‘It is necessary for trustees to read and understand a memorandum of guidance to discern the settlor’s wishes, and then with those wishes in mind make an independent assessment of the appropriate course of action, taking into account not just the memoranda, but all relevant factors.’

 

Independent decision-making

Trustees should take particular care when exercising powers in a way that departs from the settlor’s expressed wishes, as these decisions are more likely to be challenged by beneficiaries.

Although trustees are not ordinarily required to give reasons for their decisions, if that reason is challenged, they may be required to show that their decision was properly reached. Where a beneficiary can convince a court that there is a genuine and substantial dispute about whether a decision was reasonably open to the trustees, the court may scrutinise the decision-making process.

In those circumstances, trustees will need to show that the decision was within their powers, was made for a proper purpose and was rational, that it took into account relevant considerations and ignored irrelevant ones, and that the decision was reasonably open to the trustees in the circumstances. This list is not exhaustive but illustrates that the exercise of trustee powers can be complex.

 

Other options for trustees

Where trustees propose to make a decision that departs significantly from the wishes of the settlor – or involves a particularly significant or ‘momentous’ decision regarding trust assets or beneficiaries – the trustees should consider applying to the High Court for a ‘blessing order.’ This type of application takes advantage of the High Court’s supervisory role in relation to trusts and asks the court to ensure that the trustees have properly formed their view and that the proposed decision is one that is reasonably open to them. If granted, the order can provide trustees with protection from later challenge.

Difficulties can arise where the settlor’s later wishes differ from the context and purpose for which the trust was originally established. Over time, a settlor’s intentions may evolve; guidance provided years after the establishment of the trust may sit uneasily with the trust’s original objectives. In such cases, trustees may conclude that the later expression of wishes carries less weight than the underlying purposes of the trust, given the trustees’ duty to administer the trust in accordance with those purposes.

If faced with this situation it would be worth discussing with us whether there are powers to vary the trust and to add/remove beneficiaries, and whether restructuring the trust through these means may achieve a more secure outcome.

While it is common for settlors to leave written guidance for trustees, such documents are not binding but instead form part of the broader context that trustees should consider when making decisions. Trustees must ultimately exercise their own independent judgement. They should neither follow a settlor’s wishes blindly nor disregard them entirely.

Where significant decisions are required and uncertainty exists, it would be prudent to take legal advice and consider all available options including whether to seek the guidance of the High Court through an application for a blessing order.

 

[1] Chambers v S R Hamilton Corporate Trustee Ltd [2017] NZCA 131.

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2025.     Editor: Adrienne Olsen.       E-mail: [email protected]     Ph: 029 286 3650 

Death, property and prenups

Estate Planning, Family Law, Property & Asset Protection, Property & Relationship Law, Wills & Succession
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The Rimmer case has changed the rules – for the meantime

Many couples now sign agreements ‘contracting out’ of the Property (Relationships) Act 1976. These contracting out agreements are commonly known as ‘prenups.’

Even though some prenups contain clauses that say couples must review the agreement every five years, or when a significant event happens (such as the birth of a child), they are almost never reviewed.

 

Early relationship prenups

What usually happens is that at the start of their relationship, a couple decide to buy a house together. They want to protect their respective deposits. They may have children from prior relationships to whom they want to leave their ‘share.’ They buy a house as tenants in common and sign new wills. They also sign a prenup stating:

  • Their shares in the house are their respective separate property
  • They may give each other a right to occupy their share of the home for, say, two years after their death, and
  • They intend leaving their separate property to their respective children.

What typically happens next is that the prenup and the wills are put into the bottom drawer and forgotten about. The couple may get married (which automatically revokes their wills), and/or they sell their first house and buy a new property that better suits their needs.

They often buy the new house as joint tenants as, after a lengthy relationship, they want to ensure their spouse inherits the home and cannot get kicked out by their late spouse’s children. When they die, their property lawyer would give them the standard advice that property that is owned jointly passes automatically by survivorship and does not form part of your estate.

 

Dying

When one spouse dies, leaving a mix of property in their personal and joint names, what happened next used to look like this:

  1. Transmitting all jointly owned property (the house, the joint bank account, etc) into the sole name of the survivor
  2. Identifying any property in the deceased’s sole name, and
  3. If the deceased had a will, distributing in accordance with that, or If the deceased died without a will (intestate), distributing in accordance with the Administration Act.[1]

 

What happens now?

This long-standing estate administration process has recently been upended by the Rimmer decision in the Court of Appeal.[2] This decision made two statements that have changed the way lawyers think about prenups:

  1. It is the prenup (not the will, property law or the intestacy rules) that governs what part of the relationship property forms part of the deceased spouse or partner’s estate,[3] and
  2. A prenup will always be given effect to (unless successfully challenged) on the death of spouse or partner.[4]

This has now changed the process to:

  1. Finding out whether there is a prenup, and, if there is
  2. Dealing with all the property specified in the prenup as set out in the prenup
  3. If there is property NOT covered by the prenup, the survivor can either:– Apply for division of the relationship property that is not covered, or
    – Receive their gifts under the will if there is one, or under the intestacy rules if there is not.

 

How is this different?

The rules of property law ordinarily decide what falls into an estate following someone’s death. That is, if they own an asset in their sole name (such as an identifiable share in a home, or a bank account in their sole name), that will form part of their estate. However, if they own property jointly with someone else, that will pass automatically to the surviving owner(s).

In saying that ‘the division instead proceeds in accordance with the s 21 agreement,’ Rimmer appears to be suggesting that property owned solely in the name of the deceased could nevertheless be transferred to the survivor if it is defined in the prenup as relationship property (particularly if the prenup specifies how relationship property is to be divided in the event of death).

That is a huge departure from the current rules, which state that, when someone dies, their executors (if they have a will) or administrators (if they die without a will) have a strict duty to distribute their property either in terms of the will or the intestacy rules.

If their spouse or partner disagrees with those rules, they can elect to file an application in the Family Court; whatever the court then decides takes precedence over the will or intestacy rules. Rimmer seems to suggest that the executors/administrators can circumvent the rules!

 

What next?

Now as a result of Rimmer, the first thing we as lawyers need to do is find out if there is a prenup – even if it is 30 years old!

Instead of just working out what passed by survivorship (with everything else going to the estate), we now must establish how a potentially outdated prenup applies to the property owned by the deceased many years later.

The Court of Appeal decision in Rimmer, may not be the last word, as the Supreme Court has granted leave to appeal, so it may be that the rules change again.

For now, however, make sure if you have a prenup, that both your prenup and your will agree on what should happen to your property when you die.

If you think you have a prenup and you haven’t reviewed it in more than five years, now is the time to do so!

[1] Section 77 of the Administration Act 1969.

[2] Rimmer v Wilton [2025] NZCA 374.

[3] Para [40].

[4] Para [39].

 

DISCLAIMER: All the information published in Trust eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Trust eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2026.     Editor: Adrienne Olsen.       E-mail: [email protected]      Ph: 029 286 3650

 

Planning for Tomorrow: Keeping Family Fair and Secure

Estate Planning, Family Law, Legal Guidance, Life Planning, Trusts & Wills, Wills & Estates
0

As life moved forward, Luke’s family grew. He now had two children, including Mildred, whom he had adopted. It became important to Luke that both Mildred and his other daughter, Isabelle, were treated equally in his estate planning, so he contacted his lawyer.

Luke updated his will to reflect the new addition to his family. He ensured that his adopted child would be provided for on the same terms as his biological child, leaving no room for uncertainty. At the same time, Luke recognised that several antique items he had inherited from his late mother held special meaning for Sally and should ultimately pass to her. His will therefore specifically gifts those items to his daughter, Isabelle.

Luke appointed his brother and sister as executors and trustees, giving them responsibility for administering the estate. He also provided that the remainder of his estate be held on trust and shared equally between his two children when they reach the age of 18.

Luke also took practical steps to ensure his affairs were in order. He kept a copy of his will, his insurance policies, and a list of his bank accounts together in a secure drawer and made sure his brother and sister knew exactly where to find these important documents if anything were to happen to him. He also ensured they were aware that the original will is held securely at the Edmonds Judd office.

With everything clearly documented and the right people appointed, Luke now has peace of mind knowing his children will be looked after and his wishes will be carried out.

Georgia Willard

An opportunity to make a difference

Charitable Giving & Philanthropy, Community & Social Impact, Future Planning & Legacy, Trusts & Bequests, Wealth & Inheritance
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A gift to charity in your will

Over the next few decades, New Zealand will go through the biggest shift of money in its history. As the older generation (the Baby Boomers) pass away, they will leave behind a huge amount of wealth — over $1 trillion — to their children and grandchildren.

This is commonly referred to as the Great Wealth Transfer. While it is expected that most of this money will go to family, it’s also a once-in-a-lifetime opportunity to help others by leaving a gift to charity in your will.

 

Looking after family — and the future

When people make a will, they usually focus on taking care of their whānau. That’s important.

But more New Zealanders are also starting to think about the bigger picture. “What kind of world do I want to leave behind?”

Giving to a cause you care about — such as the environment, education, medical research, local charities or community organisations — is a powerful way to leave a positive mark on the world.

A gift – whatever its value — can make a big difference to that cause.

 

How to leave a gift in your will

A gift in your will is called a bequest. You can choose to leave:

  • A percentage of your estate (all your money and assets)
  • A specific amount of money
  • Something you own (for example, a property or shares), or
  • What’s left over in your estate after looking after your loved ones.

Your bequest can go to one charity or organisation or you may name several in your will, or you may wish to leave a gift to a local community foundation where it can establish a fund in your name that reflects your wishes.

 

A legacy that lives on

Unlike cash that can be quickly spent, a bequest to charity can keep doing good for years. A bequest could, for example, protect nature, support communities, fund research or help fund scholarships to students.

You can:

  • Let the organisation decide how to use your bequest
  • Say what you’d like it used for, but give them flexibility, and
  • Talk to them first to make sure your gift will help in the best way.

Make a difference

Your will is more than a legal document — it’s a way to show your values and your hopes for the future.

If every New Zealander could leave a gift to charity in their will – whatever its size – together we can create a stronger, kinder Aotearoa.

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2025.     Editor: Adrienne Olsen.       E-mail: [email protected]     Ph: 029 286 3650

 

Digital assets and your estate

Digital Assets & Cybersecurity, Legal Updates & Guidance, Probate & Executor Responsibilities, Technology in Everyday Life, Trusts & Succession, Wills & Estate Planning
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Why planning ahead matters

For many New Zealanders, daily life is now as much online as it is offline. From internet banking and investment platforms to email accounts, social media, cloud storage and cryptocurrencies, our ‘digital footprint’ has become an important part of who we are and what we own.

Yet most wills and succession plans still solely focus on traditional assets such as property, shares and savings. Digital assets are often overlooked, leaving families and executors struggling to access information and take control of these assets when the will-maker dies.

 

What are digital assets?

Generally speaking, a digital asset is any item of value that is in an electronic or virtual form (rather than physical). These include:

  • Financial accounts – internet banking, investment platforms, PayPal or electronic wallets
  • Blockchain assets, non-fungible tokens (NFTs) or cryptocurrencies
  • Personal content such as photos, videos or documents
  • Social media accounts – Facebook, Instagram, X (formerly Twitter) or TikTok accounts, and
  • Business platforms – domain names, websites, email lists or digital records.

Some of these assets can hold significant financial value. Others may be priceless to family members wishing to preserve a loved one’s memories.

 

Planning ahead is important

Digital assets are protected by passwords, encryption and restrictive service agreements. Executors cannot simply assume control of online accounts and services without legal authority. This can cause significant problems:

  • Executors may be locked out of key accounts
  • Valuable assets can be lost if no one knows how to retrieve them — especially cryptocurrencies that are unrecoverable without a private key, and
  • Service providers may refuse access due to privacy or contractual limits.

The courts have recognised that certain digital property, such as cryptocurrencies, can be legally owned and held on trust.[1] However, ownership of many other online assets, such as social media accounts or cloud storage, is less certain, as users often hold only a licence, which may be non-transferable and could terminate on their death.

 

New Zealand’s legal grey area

New Zealand law has yet to fully catch up with the digital age. The Wills Act 2007 and Administration Act 1969 do not specifically address digital assets. Executors, therefore, must often rely on general property law, privacy regulations and the terms of individual service-providers.

Some overseas jurisdictions, including several US states, now grant executors explicit rights to access digital assets after the will-maker’s death.

Until similar reform occurs here, careful planning remains the best protection to ensure digital assets can be accessed, managed and transferred according to the will-maker’s wishes.

What to do now

  • Make a digital inventory – list all your online accounts, platforms and digital property
  • Store login credentials securely – avoid including passwords in your will, as it becomes public after probate. Instead, store passwords securely using a password manager, encrypted file or a separate memorandum of wishes held safely with us
  • Appoint a digital executor or include specific instructions in your will – specify who can access, manage or close your digital assets
  • Address cryptocurrencies directly – record how and where private keys or hardware wallets are kept. Without them, digital currency is lost forever, and
  • Provide guidance for sentimental items – in your memorandum of wishes state whether you want social media accounts, photos and videos deleted, memorialised or handed to your family.

We are here to help

We can help your estate planning keep up with the digital world. This includes drafting appropriate will clauses, reviewing trust arrangements and guiding executors on accessing digital accounts. Many firms include digital-asset checklists to make the process easier, saving time, money and stress later.

The bottom line

Digital assets are no longer a niche concern — they are part of everyday life and should be part of estate planning. Including them in a carefully drafted will is the simplest way to protect your online legacy and ensure that both your physical and digital affairs are properly organised.

1 Ruscoe v Cryptopia Ltd [2020] NZHC 728.

 

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2025.     Editor: Adrienne Olsen.       E-mail: [email protected]     Ph: 029 286 3650

3 Things You Might Be Getting Wrong About Retirement Villages

Community & Lifestyle, Elder Law / Retirement Planning, Financial Planning, Legal Insights / Advice, Property & Real Estate
0

Retirement villages are becoming a popular option for New Zealanders planning their retirement, but it is not the same as buying a house. Most villages provide an Occupation Right Agreement (ORA), which gives you the right to live there and use the facilities rather than legal ownership. Here are a few common misconceptions that can catch people out.

  1. “Weekly fees cover all my costs”
    Weekly fees usually cover village services (gardening, security, communal facilities), but residents often still pay for utilities, care services, or extra support.
  2. “All the money will go back to my family when I die”
    Your entry payment will likely not be returned straight away when you leave or pass away. In reality, it depends on the terms of the ORA and can often require the unit to be re-licensed to a new resident. Most villages will also deduct what’s often called a deferred management fee which can be up to 20–30% of the original entry price
  3. “All Contracts Are the Same”
    Not all retirement villages play by the same rules. Fees, exit conditions, and benefits vary, and small differences can have a big impact.

Moving into a retirement village is a big decision, both legally and financially. If you are considering this step, it is important to seek advice from your lawyer, so you fully understand what it means for you and your family.

 

Georgia Willard

Trustees signing unlimited bank guarantees?

Bank Guarantees, Best Practice for Trustees, Lending & Securities, Protecting Beneficiaries, Trust Law & Obligations, Trustees & Duties
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Danger of breaching duties

When you buy a house in your own name, and you need a loan to do it, you will be the borrower, the owner and the security provider (mortgagor).

In some situations, these are different people. For example, the owners might be the trustees of a trust, but the borrower is an individual. There are good reasons for this sort of structure, particularly from a relationship property or creditor protection perspective. This does, however, make things complicated from the lender’s perspective, and can sometimes cause them to inadvertently ask trustees to breach their duties, as this article will explore.

 

Borrowing vs security

Whoever buys a property, be that you or your partner, a company or the trustees of a trust, as the owners you are the only ones who can give the lender a mortgage. The reason is that you cannot grant a mortgage, which is a type of security that is registered against a title to ‘real property’ (another word for land or ‘bricks and mortar’) unless you are named on the record of title as the owner or owners of the property.

There are a number of reasons why the borrower (person borrowing the money from the lender) and the security provider (person giving a mortgage or a guarantee) might not be the same person:

  • For asset protection purposes you will usually be the borrower, while the trustees will provide a mortgage by way of security, and there will be a guarantee linking them together (sometimes called an ‘interlocking guarantee’)
  • If a child is borrowing money to buy a house and their income is deemed insufficient to service a mortgage, a parent might guarantee their lending, or
  • If a company borrows 100% of the purchase price of a property, the shareholders (and sometimes the director/s), will be required to sign a guarantee (and often mortgage security over another property as well).

 

Trustee duties

When trustees are asked to provide security, whether in the form of a mortgage, a guarantee (or both), they must be mindful of their duties to all of the beneficiaries of a trust. These include duties:

  • To invest prudently, and in doing so must exercise the care and skill that a prudent person of business would exercise in managing the affairs of others,[1]
  • Not to bind or commit trustees to future exercise of discretion:[2] they may, for example, be called on to honour the guarantee in the future by paying the beneficiary’s lending, and
  • To be impartial as between the beneficiaries:[3] Will giving the guarantee be unfairly partial to one beneficiary if the trustees cannot do the same for another?

Trustees also have an overarching duty of care which encapsulates hundreds of years of case law[4] which makes it clear the trustees’ duty is to hold or deal with trust property for the benefit of the beneficiaries as a whole.

 

Unlimited guarantees

An unlimited guarantee states that the guarantor is liable for all amounts the borrower owes, however much that is, until every cent owing has been repaid, or the guarantor is released from their obligations.

As an example, if a beneficiary of a trust borrows $750,000 to buy their first home, and the trustees of the trust sign an unlimited guarantee, the trustees’ liability can extend to:

  • The $750,000 loan
  • The borrower’s car loan they take out a year later
  • The new loan for renovations taken out three years after that, and/or
  • The borrower’s credit card debt.

This could breach a number of the trustees’ duties.

 

Best practice

Trustees should not sign an unlimited guarantee without first considering their duties to all the beneficiaries. In many cases, consideration of their duties will lead trustees to realise that it would be more prudent to sign a limited guarantee.

While all the major lenders are familiar with and will grant a limited guarantee, they will issue an unlimited guarantee by default unless you ask specifically.

If you think that as a trustee you will be asked to guarantee a beneficiary’s lending, make sure you ask for that to be a limited guarantee.

[1] Section 30, Trusts Act 2019.

[2] Section 33.

[3] Section 35.

[4] Section 29.

DISCLAIMER: All the information published in Trust eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Trust Speaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2025.     Editor: Adrienne Olsen.       E-mail: [email protected]      M: 029 286 3650

The office of executor: does it ever end?

Estate Administration, Executors & Trustees, Legal Responsibilities, Planning Ahead, Trusts & Probate
1

What is an executor?

An executor is named in a will as the person the will-maker appoints to administer their estate after their death and to carry out the terms of their will.

Executors have a number of responsibilities. Their first task is usually to locate the will-maker’s most recent will and, through their lawyer, apply for a grant of probate, so they have authority to manage the estate. Where a will doesn’t name an executor, or they are unwilling or unable to take on the role, an application must instead be made for a grant of administration, and that person will be known as an administrator. Their role is the same as an executor’s role.

Once the executor has authority to do so, they must identify estate assets and bring them into the estate. This means putting those assets into the name of the estate, closing bank accounts, withdrawing KiwiSaver, selling shares and, in many cases, selling land or property. Sometimes executors need to recover estate assets by filing claims in court. Executors are also responsible for paying any estate debts and liabilities.

Executors must also comply with any other legal obligations, such as keeping detailed records, providing information to certain people, filing tax returns and following any court orders.

 

Is an executor a trustee?

An executor’s role is similar to, but not the same as, the role of a trustee. Three key similarities are:

  1. Executors and trustees must both act in the interests of the beneficiaries, rather than in their own interests
  2. They must follow the terms of the will or trust document, and
  3. They cannot be paid for their role unless the will or trust document allows this.

An executorship typically lasts until all of the estate assets have been identified and brought into the estate, all debts have been paid, and any litigation about the validity or terms of the will, or how the estate should be distributed, has finished.

After all those steps are completed, an executor ‘transitions’ to become a trustee. At that stage the executor has become a trustee and holds the estate assets on trust for the beneficiaries of the estate. Once certain time limits have passed, the estate assets will usually need to be distributed to the beneficiaries.

 

Distribution

An executor’s role is often thought to come to an end when the estate assets are distributed to the beneficiaries. This is known as ‘final distribution.’ Usually, there is nothing left for an executor to do at this point.

However, the role of executor (or administrator) never truly comes to an end. Unless an executor or administrator is appointed by the court for a limited period or purpose, it is an appointment which lasts for life. After the final distribution, the executor role essentially becomes dormant as there are no more assets for the executor to administer. In some cases, though, that will change unexpectedly.

As set out in a 2023 case,[1] further assets might be discovered which need to be administered by an executor or administrator. This may happen when the will-maker:

  • Had assets in multiple countries, such as bank accounts, some of which were not discovered immediately after their death
  • Was entitled to an inheritance, but payment was delayed for many years (for example, until a house was sold or a different relative died), or
  • Became entitled to an insurance or compensation payment some years after their death, but which was not originally known about at the time of their death (for example, as an insurance policy was held overseas).

When an estate receives new assets, this will revive the role of the executor or trustee, even if that role had previously come to an end.

 

The good, and the bad

An executor’s role can also be revived for less happy reasons. Sometimes a new liability is discovered after all the assets have been distributed; the executor is responsible for dealing with this. As long as the executor has advertised for creditors under section 79 of the Trusts Act 2019, they will usually be protected from being personally responsible for paying the liability.

This illustrates the importance of attending to the estate administration thoroughly, and taking legal advice before making a final distribution – or what you might think is a final distribution!

 

Conclusion

Being an executor is a big responsibility, and it is not always over when you think it has been completed. If you are considering who to name as executor in your will, you should be aware that the role is very important and can last longer than expected.

If you are named as an executor, think carefully before accepting the role, and to take legal advice if you are unsure about anything.

 

 

[1] Schischka v Schischka [2023] NZHC 2275 at [60].

DISCLAIMER: All the information published in Trust eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Trust Speaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2025.     Editor: Adrienne Olsen.       E-mail: [email protected]      M: 029 286 3650

Planning Ahead: How Enduring Powers of Attorney Helped Steve’s Family

Caring for Aging Parents, Client Stories, Elder Law, Enduring Powers of Attorney (EPA), Future-Proofing Your Family, Health & Wellbeing, Legal Tips, Life Planning, Peace of Mind Planning, Wills & Estates
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A few years into Steve’s retirement, things started to change.

 

Steve was not quite himself anymore. He became forgetful, sometimes confused, and would occasionally lose track of where he was or what he had planned for the day. At first his children, Luke and Sally thought it might just be part of getting older. But over time, it became clear that it was something more serious. Steve was beginning to lose mental capacity.

 

It was a difficult time. Watching the strong and capable father they had always relied on start to struggle was heartbreaking. But one thing made a huge difference. Steve had prepared for this.

 

Years earlier, with the help of Edmonds Judd, Steve had put in place Enduring Powers of Attorney. He had taken the time to meet with a lawyer, talk through his options, and sign the documents while he was still well and able to make decisions for himself. He had appointed both types of attorney. One for property, which would allow his children to manage his finances and property. And one for personal care and welfare, where he had named Sally as his first attorney to make decisions about his health and daily care.

 

When Steve’s condition worsened, Luke and Sally were able to step in without any delays or uncertainty. Luke handled the financial side, making sure bills were paid and everything stayed in order. Sally worked closely with Steve’s doctor and made the final call on his treatment when he was no longer able to do so himself.

 

There was no need to go through the courts. There were no arguments about what should happen or who should decide. Steve had made his choices clear, and they could simply carry them out.

Because of the advice and support he received from Edmonds Judd, Steve’s family had the tools they needed to care for him with clarity and compassion. His wishes were protected, and his children could focus on what mattered most.

 

It was not just legal paperwork. It was peace of mind. And it made all the difference when Steve and his family needed it most.

Georgia Willard

Get in touch today, we’d love to talk.

+64 7 872 0236 [email protected]