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Articles by The Professional Trustee Team

Trustee Duties

AUTHOR: The Professional Trustee Team

POSTED: 02 July 2021

So you have set up a trust and you are a trustee, and you wonder, “what are my obligations as a trustee?”

To answer that question we turn to the Trusts Act. Under this Act there are two classes of trustee duties, being mandatory and default. The mandatory duties are what they sound like. They are irrefutable obligations that trustees must abide by. On the other hand, default duties can be rebutted by terms of the trust deed.

Mandatory Trustee Duties

So with this in mind what are the mandatory duties of a trustee? Fortunately, they are likely what you would expect to be the case and how you would likely behave as a trustee in any event.

a) You must know the terms of the trust.

b) You must act in accordance with the terms of the trust.

c) You must act honestly and in good faith.

d) You must hold or deal with trust property and otherwise act (i) for the benefit of beneficiaries, in accordance with the terms of the trust; and (ii) where the trust has a permitted purpose, to further that permitted purpose in accordance with the terms of the trust.

e) Exercise your powers for a proper purpose.

In addition, trustees have an obligation to retain documents relating to the trust. Every trustee must have a copy of the trust deed and any variations to it. On top of that, at least one trustee must have the following documents:

a) Records of the trust property that identify assets, liabilities, income and expenses

b) Records of trustee decisions

c) Any written contracts entered into by the trustees

d) Deeds of appointment and removal of trustees

e) Any memorandum of wishes from the settlor

f) Any other documents necessary for the administration of the trust

If you are a trustee of a trust and you are concerned about complying with these mandatory duties or keeping trust records, then please contact us at GRA. We offer a professional trustee service and can assist. Phone +64 9 522 7955, info@gra.co.nz or via our website.

Request a Meeting

The Professional Trustee Team

09 522-7955

info@gra.co.nz

© Gilligan Rowe & Associates LP

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Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.

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This letter is to express my appreciation for the assistance and encouragement of both Anthony Lipscombe and particularly John Heaslip over the last financial year. The period since activating my trading trust has been one of considerable stress, as well as personal development, as I embarked on this as a relative business neophyte with virtually no awareness of the contemporary requirements of running a business, particularly the financial records aspect. During much of this period I have therefore felt considerable out of my depth. However I have been lucky enough to have had the benefit of the advice and support of John Heaslip in rationalizing what was a fairly chaotic set of records of the first year property trading. I am able to say that John in particular, has been unstinting in his attention to my needs and has done so in a manner which has never alluded to my extremely rudimentary grasp of managing a business, or even of being unable to set out a spread sheet properly. The result of the above guidance is that now, although my trading trust would still not be able to operate without the advice of GRA, I do least feel a sense of satisfaction that I have got to my present point without major disaster and that my property trust does now have some kind of firmer basis for any future activities - Name withheld by request

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