WealthPlanning Archives

Budget 2026

June 3, 2026

Government & Policy, Infrastructure & Development, Public Sector, Social Welfare Law, Wealth & Retirement Planning

Securing New Zealand’s future says the Minister of Finance

Despite pre-Budget announcements for the health, education and defence sectors, this Budget certainly contained some meaty content.

The government’s broader approach could therefore be characterised as a ‘meat and veg now, dessert later’ strategy to economic management.

With a net operating package of an average $2.146 billion pa ($8.272 billion over the next four years), the health sector is a major winner, followed by education (including tertiary), defence and intelligence, law and order, etc totaling new expenditure of $14.666 billion over the next four years.

On the other side of the coin, the Minister has anticipated savings of $6.394 billion over the next four years, making the net package of spending of $8.272 billion over the same period.

Health

A $5.5 billion increase in funding for frontline health services
Funding for three-day postnatal stays ($34 million) and $16 million allocated to specialist paediatric palliative care
Pharmac has additional funding ($54 million) to buy more medicines
$682 million for capital investment includes a new tower block for Whangārei Hospital, redevelopment at Palmerston North and Hawke’s Bay Regional Hospitals, and
Funding to lower the eligibility age for free bowel screening from 58 years to
56 years; benefitting 200,000 Kiwis.

Education

The government’s aim is to lift student achievement in schools. The cancellation of the final year fees-free initiative will help fund preparing young people for trades and other vocational education. The main points are:

$131 million to help students meet standards for the three Rs (reading, writing and arithmetic)
Supporting the refreshed curriculum and new national qualifications implementation
Continuing the Healthy School Lunches Programme
Doubling the number of trades academy places providing free trades training for year 11-13 students, and
Around 230 new classrooms will be built, and there is a funding increase for school property maintenance and daily operations.

Defence and foreign affairs

Increased funding to retain current defence force staff levels, as well as increasing numbers in key areas
$110 million for international development cooperation, with particular focus on the Pacific, and
More funding to enable aircraft, ships (including keeping our two Anzac-class frigates ship-shape) and land forces to continue to operate.

Social housing and welfare

Increasing the accommodation supplement for people in private rentals, and increasing income-related rents for people in social housing
Funding for up to 2,250 additional social houses
More case management help to support solo parents into work, and
$45 million for extended community food support and children’s breakfast programmes.

Infrastructure

The government acknowledges that New Zealand’s current infrastructure must be not only be maintained, but also expanded through new investment.

The construction of the Cambridge to Piarere Expressway
Renewing and upgrading the rail network, particularly in Auckland and Wellington
Financial incentives to councils to encourage housing growth
Investment in hospitals, schools, courthouses, police stations and defence assets, and
Funding to drive the reforms to the resource management system.

These investments are in addition to previously approved current and pipeline projects.

Law and order

The government’s focus is to reduce crime and keep New Zealanders safe. Proposals include:

$503 million for frontline Corrections services
More support ($50 million) for frontline policing
Funding to reform the firearms safety system, and
$21 million for Customs to combat drug smuggling and transnational crime.

Fuel response

New Zealand is currently facing unprecedented pressure on its energy supplies resulting from the hostilities in the Middle East. The government will introduce:

A $50/week increase to the In-Work Tax Credit for up to a year to help working families with increased fuel costs
Funding for additional strategic fuel reserves to firm-up the country’s fuel resilience, if required
A temporary increase in mileage rates for support workers and people travelling for specialist treatment
Additional funding for Fire and Emergency, Corrections, Policy, Customs and Education to maintain frontline activities during this period, as well as
A $450 million contingency fund for future fuel-related costs.

Energy security is now top-of-mind in this current uncertain fuel climate. The government proposes:

Capital investment in Genesis Energy to accelerate the development of new generation and firming capacity, and
A new loan guarantee scheme to support businesses to transition away from the use of gas.

Public service

The proposed cuts to the public service have already been announced, and the reception has been mixed. The government wants to see improved productivity and greater efficiency to reprioritise frontline services while reducing the public service headcount.

Other initiatives include:

$200 million will be raised by a new tax on banks to help cover Reserve Bank costs
Rules will be changed to tax loans made by companies to shareholders that remain outstanding six months after the company is removed from the Companies Register
Stricter regulations for charities: a limit of $100,000 has been set for people claiming tax deductions for making charitable donations
More funding to control the dratted wilding pines
$184 million for Oranga Tamariki to protect and support children
Fringe Benefit Tax rules for private motor vehicles will be simplified
Making the SuperGold Card an official form of ID, and
Funding for new technology to improve our emergency management system.

NZ Superannuation

A vexed topic for any political party. Although not covered in the Budget, with the ballooning costs of National Super (projected to be $31.2 billion in 2030), all recent governments have grappled with future funding. Raising the age of entitlement, albeit slowly, and means testing are only two of the many measures proposed to alleviate the pressures on government funds. It is clear that the funding of NZ Super is a major issue and will need to be strongly addressed in the near future.

Overall the government hopes the Budget funding will lead to an increased GDP and a healthier economic environment.

To read the Budget in more detail, click here for the Minister’s Budget speech. The Treasury’s website, click here, is also very helpful.

If you would like to discuss more about the government’s proposals, please don’t hesitate to contact us.

DISCLAIMER: All the information published in Commercial 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 Commercial 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

KiwiSaver changes open the door to first farm ownership

May 6, 2026

Banking & Finance, Government & Policy, Property Law, Rural & Agricultural Law, Wealth & Retirement Planning

Good news for rural workers

The government has announced important changes to KiwiSaver that will make it easier for farmers and rural workers to use their KiwiSaver to buy their first farm. These reforms acknowledge the unique way in which farms are owned and operated in New Zealand.

For many in the rural sector, particularly sharemilkers, contract milkers and farm managers eager to climb the property ladder, this represents a meaningful step toward farm ownership.

Legislation giving effect to these changes will be introduced to Parliament in the middle of the year.

Key changes

Until now, KiwiSaver first-home withdrawals have been limited to residential property purchases, with strict requirements that the buyer both owns and lives in the home. This has created barriers for those pursuing farm ownership, as farms are often:

Purchased through companies or trusts, rather than in an individual’s name, and
Used as both a business and a place of residence, sometimes with accommodation arrangements tied to employment.

The upcoming changes are designed to address these challenges by allowing eligible KiwiSaver members to withdraw their funds to buy a first farm, even where the ownership structure is more complex.

Who can benefit?

The updated rules will apply to people who would ordinarily qualify for KiwiSaver first-home withdrawal, who have contributed to KiwiSaver for at least three years and not previously owned a home (or being approved as a ‘second chance’ buyer). The changes are aimed at first-time farm buyers, not those expanding existing farming operations.

Key conditions

While the rules are becoming more flexible, there are still some important conditions for first-time farm buyers:

Control of the farm: You must have a meaningful ownership interest in the entity purchasing the farm (for example, a majority shareholding or controlling interest). This ensures KiwiSaver is being used to support genuine ownership, not passive investment
Connection to the property: The farm must still have a residential element connected to you. While the strict ‘live in the home’ rule is being relaxed, the purchase must still align with the intent of helping you secure your primary place of living and working
First property focus: The withdrawal remains limited to your first property purchase (or equivalent approved situation), and
Standard application process: You will still need to apply through your KiwiSaver provider, providing supporting documents such as a signed sale and purchase agreement and statutory declarations.

Why this matters for farmers

For many in the dairy and wider farming sector, progressing from employment or sharemilking into ownership has always required significant capital. KiwiSaver is often one of the few accumulated assets available to younger farmers. By allowing KiwiSaver funds to be used in farm purchases — and recognising company and trust structures – the law is now better aligned with how farming businesses actually operate.

This change is expected to improve access to deposits for first-time farm buyers, support succession planning within the rural sector and help younger farmers transition into ownership earlier.

Considerations before proceeding

While the changes are positive, there is still some complexity involved. Before relying on KiwiSaver funds for a farm purchase, it is important to consider:

How the farm purchase will be legally structured
Whether your level of ownership meets the control requirements
The impact on lending and finance arrangements, and
Ensuring your application meets your KiwiSaver provider’s requirements.

We recommend you seek legal and financial advice early in the process; this will help ensure everything is set up correctly from the outset.

Final thoughts

These reforms mark a practical and long-overdue shift in KiwiSaver policy. By acknowledging that farms are both homes and businesses, the government will create a more realistic pathway for rural New Zealanders to enter farm ownership.

With the changes in the legislative pipeline, if you are considering farm ownership, now is a good time to start planning and take advice on how best to position yourself.

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

April 28, 2026

Estate Planning, Trust Law, Trustee Duties, Wealth & Asset Planning, Wills & Succession

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

Options to buy a property during a cost of living crisis

April 9, 2026

Banking & Finance, Property Law, Relationship Property, Wealth & Asset Planning

While the property market has settled somewhat after the Covid boom, house prices in New Zealand are still high. For many, buying a home on your own is no longer viable. It is becoming necessary to consider alternative structures to help make buying a property more affordable.

Borrowing from parents

It is not a new concept, but the rise of house prices in New Zealand has meant that it is very difficult to buy a home without some extra financial help from mum and dad.

If this seems to be a realistic plan, it is important that both you and your parents get separate advice on how this could be structured.

Loans are an effective way for parents to help their children buy a home, without exposing those funds to relationship property losses. Lenders will often want money from parents to be a gift as part of a purchase. However, careful advice and structuring of money from the bank of mum and dad can mean that parents can provide financial assistance without fear of losing half of their money if a child and their partner separate.

It is possible for parental loans and bank loans to both exist in harmony provided you seek the right advice up front. You want to ensure all parties are protected before taking that first step to buy a property.

Co-ownership

Owning a home with a friend or relative to alleviate the rising costs is becoming a more common way for Kiwis to get onto the property ladder.

An important step to include as part of entering into co-ownership arrangements is to set out and define both parties’ understanding and expectations in respect of the property expenses, each party’s initial contributions and what happens if one of you dies, or wants or needs to sell their share.

These considerations are typically set out in what is called a property sharing agreement. Again, good advice before you buy a property with a friend or family member and a comprehensive property sharing agreement will help both parties understand their own rights and obligations before it is too late. As well, it assists to preserve whatever relationship you have with your co-owner if you do decide to go your separate ways.

Property sharing agreements can cover a range of co-ownership relationships from parent/child, siblings, other more remote family relationships or friends. Co-ownership in a de facto or spousal relationship, however, requires different specialist advice. Before you dive into buying a property with your friend, speak to us about ensuring both parties are protected and go into the venture fully aware of what you are getting into.

Iwi schemes

There are now a range of iwi schemes available for Māori to enter into shared equity ownership with either a scheme provider or their local iwi.

The criteria to qualify for these schemes differs depending on the scheme, but usually these are predominantly based on whether or not your whakapapa to a particular iwi, along with requiring some financial assistance to buy your first home.

The iwi or scheme provider buys a share of the property with you on specifically drafted terms that govern your shared ownership. These also usually include a timeframe in which you are meant to buy out the iwi or scheme provider from the shared equity arrangement, ultimately resulting in you owning your own property.

Other schemes with a wider base or catchment may assist members from a region or iwi or locality.

Understanding the criteria to apply and/or the rules that govern any iwi-based shared equity schemes are important. Be sure to contact us for advice on how the scheme that you qualify for works and what you have to do to keep to your side of the deal.

DISCLAIMER: All the information published in Property Speaking 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 Property Speaking 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

Trustees taking on liabilities of the trust

February 26, 2026

Litigation & Dispute Resolution, Risk Management, Trust Law, Trustee Duties, Wealth & Asset Planning

Can they be held personally responsible?

When someone acts as a trustee of a family trust, they often take on liabilities associated with the trust. Those liabilities generally include obligations to the trust’s lender (such as a bank) or other creditors.

While that does not usually cause issues for the trustee, there can be cases where a trustee is left personally responsible for a trust debt that they are not then able to recover from the trust. It’s a daunting prospect for both professional and non-professional trustees.

How trustees contract

It is a common misconception that when signing documents in your capacity as a trustee, your risk is limited to the assets of the trust. Unfortunately, this is not the case. A contract that is enforceable against a trustee can be enforced against the trustees (or any one of them) personally.

The reason is that a trust is not a separate legal entity or ‘person’ in the same way as a company or incorporated society. The trust itself cannot enter into a contract or be registered on a property title; only the individual trustees’ names can be listed.

It is important, therefore, for trustees to seek advice on the form of any contract that they are entering into in their capacity as a trustee. In some situations, however, clauses can be negotiated that limit the obligations of non-beneficiary trustees to the assets of the trust at the time in question (whatever those may be). This is an important protection for non-beneficiary trustees. These clauses will not usually be extended to include trustees who are also beneficiaries.

It is also important for the trustee to have a clear understanding of the trust’s assets and whether the trust is in a position to meet its obligations under the terms of the contract being entered into by the trustees. Taking on a loan that the trust would be unable to service, for example, would not be a wise decision for a trustee to make.

How can trustees recover their losses?

Often, however, the fact that individual trustees are liable to the trust’s creditors does not cause individual trustees significant issues. Trustees have a general right of indemnity from the trust funds; if they must pay a debt on behalf of the trust, the trust’s funds must be used to reimburse the trustee.

What happens if the trust has no assets

In a recent decision of the High Court of Australia,^[1] a former trustee found himself in the unenviable position of being found liable to a creditor of the trust for payment of more than A$3 million that he was unable to then recover from the trust.

A creditor of the trust had begun court proceedings against the former trustee in 2006 relating to unpaid sums on a share purchase.

In February 2007, the former trustee resigned as a trustee of the trust and was replaced by a trustee company, whose director was the brother of the Default Beneficary and Appointor of the trust.

Nine years later (and after a series of court proceedings in the meantime between the creditor and the trustees and others), the court entered judgment against the former trustee in favour of the creditor for A$3.4 million.

In the ordinary course, the former trustee would have then demanded that sum from the trust by way of indemnity. However, the trust did not have sufficient assets to provide indemnity. The court found that the current trustees had deliberately depleted the trust’s assets to avoid any potential liability to either the creditor or the former trustee.

The current trustees of the (perhaps aptly named) Sly Fox Family Trust were found to have dishonestly and fraudulently stripped assets out of the trust by transferring its assets to various family members and companies controlled by family members of the Default Beneficiary and Appointor.

In the court proceedings that followed, it was unsuccessfully argued that the current trustees owed an obligation to the former trustee to ensure that the trust retained sufficient assets to meet any financial obligations that it might owe to the former trustee under the right of indemnity. The court, however, did not agree that the current trustees owed such an obligation to the former trustee.

Two appeals followed; the decisions of both the Court of Appeal of the Supreme Court of New South Wales and the High Court (which is effectively the Australian equivalent of our Supreme Court) were split. In the Court of Appeal the judges were split 2/1, and they were split 3/2 in the High Court. This had significant repercussions for both the creditor of the trust and the former trustee, neither of whom were successful.

What can trustees do?

Trusteeships come with risks. When taking on obligations to third parties, trustees must carefully consider the financial position of the trust, and any risks associated with the people involved.

They should also consider the terms of the contracts they are entering into and whether any clauses can/should be included to limit their liability as non-beneficiary trustees.

Indemnities are only as valuable as the assets of the trust at the time. Therefore, trustees should not rely on indemnities alone if there are other options available to limit their risk

^[1] Naaman v Jaken Properties Australia Pty Limited [2025] HCA 1.

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

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