The new Trusts Act 2019 will come into effect on 30 January 2021. Much of the Act updates or restates law that exists already, either in statute or in case law. There are, however, a number of changes about which trustees and settlors should be aware.
The Act contains ‘mandatory’ and ‘default’ duties for trustees…
Having an executor of your will is like having a manager of your affairs (your estate) after your death. Your executor is named in your will; it is his or her role to carry out the terms of your will. Many people have more than one executor; it spreads the load and it’s also good to have another executor to discuss things with.
You can choose anyone to be your executor, but they do need some special qualities. You should consider:
Age: you want them to have the energy, ability and maturity to deal with your affairs. Sometimes this can be a fine balance – if you have someone older there’s a risk they could die before you or could become incapable of fulfilling their duties. However, someone younger may not have sufficient life experience to cope with the role.
Temperament: dealing with an estate can be quite emotional. You want your executors to be calm, steady, decisive and with loads of common sense.
The law governing the division of property when a relationship ends is, after more than 40 years, set to change following the Law Commission’s comprehensive review of the Property (Relationships) Act 1976 (the PRA).
The Law Commission has identified changes that it believes should be made to ensure the regime better reflects the reasonable expectations of New Zealanders. We set out some of the proposals that may be relevant to you or your family.
Under the current law, in a marriage, civil union or de facto relationship of more than three years, the family home is automatically considered to be relationship property and subject to equal sharing. Under the changes proposed, the family home will not necessarily be shared 50/50, particularly if one partner owned it before the start of the relationship. In that situation, it is proposed that only the increase in value would be subject to equal sharing.
When a marriage, civil union or de facto relationship breaks down, the couple will usually divide their property according to the Property (Relationships) Act 1976 (the PRA). However, these two people often hold property in a trust rather than personally.
The PRA has limited remedies to access property which has been put in a trust, and this can result in unfairness when a couple separates if there are no assets that they own personally.
The Law Commission has undertaken a review of the PRA and proposed that the legislation be changed to make it easier to access trust property when a couple separates.
New Zealand’s ageing population has created a boom for retirement villages, with record numbers being developed. For many looking to retire or slow down, retirement village living is attractive – and it’s not hard to see why. A new apartment or cottage in a secure, well-maintained environment, offering a lock-up-and-leave lifestyle, and providing resort-like facilities such as cafes, gyms, pools, bowling greens, libraries and men’s sheds can be very appealing.
Many clients tell us how happy they are to have made the move, some even say they wish they had done it sooner, but retirement village living is not for everyone. It’s important to think carefully about what this move means for you – both financially, and in terms of your current and future needs.
It has been estimated that there are between 300,000-500,000 trusts in this country. Trusts have been established for many different reasons, including estate planning, creditor protection, to ensure access to rest home subsidies, tax benefits or for protection from relationship property claims.
When the reason for a having a trust is no longer valid (there’s more on this on our article Do I still need a trust? here), it is important to bring it to an end in the most appropriate way bearing in mind the powers in the trust deed and the needs of all the beneficiaries.
This article explores the two most common ways that trusts can be brought to an end – bringing forward the date of distribution (the trust’s expiry date) and distributing all the trust assets to beneficiaries.
If you have a family trust set up a number of years ago, it’s good practice to review it to ensure it is still ‘fit for purpose’. Leading on from that is the question that is often asked of us, “Should I bring my trust to an end?”
Trusts are still very useful arrangements, and there is usually a good reason why you established a trust in the first place. If that reason no longer exists, however, then it may be sensible to think about alternative arrangements.
When you hear the word ‘inheritance’, what is your first thought? Is it positive or negative? Do you think about what you could receive from your parents, or what you might pass on to your children? Answers will vary, but generally the term ‘inheritance’ carries positive connotations. The Oxford Dictionary defines an ‘inheritance’ as ‘a thing that is inherited’. More helpfully, Wikipedia defines it as ‘the practice of passing on property, titles, debts, rights, and obligations upon the death of an individual’.
For this article, however, we’re focussing on ‘debts’ rather than actual things. What happens when your parents die broke? Can you inherit a debt?
What does it mean to have ‘mental capacity’ when it comes to signing a will or an important legal document? This has recently become a hot topic, with new case law shining some much-needed light on the subject. It’s also something that families need to be aware of as their loved ones age.
Mental capacity, as a concept, seems straightforward and self-explanatory. Common sense would suggest that if there is even a slight question as to a will-maker’s capacity, an assessment should be carried out to ensure they fully understand the provisions in their will, as well as the possible consequences that could arise from them.
While most trustees and executors will assume that costs incurred in the course of their trustee or executorship will be paid from the estate or trust, the recent decision in Courteney v Pratley[1] is an illustration of the perils that trustees or executors can face when they go to court.
Trustees and executors are in charge of the property of others. They are not expected to pay for their own expenses in doing so and, as such, are usually entitled to reimbursement of the costs they incur.