The Law Commission has released its report Review of the Law of Trusts: A Trusts Act for New Zealand (NZLC R130). A copy of the report is available here.
The Commission is recommending that the Government replaces the Trustee Act 1956 with a new Trusts Act that does more than just update and reformulate the 1956 Act. The Commission is proposing an enlarged statute that, in addition to covering the matters currently dealt with in the 1956 Act, will cover such matters as the duties of trustees and the circumstances in which such duties may be avoided. The new Trusts Act would also set out the core characteristics of a trust and requirements for creating a trust.
Under the Commission's recommendations, specialist trustees that are subject to specific regulation, such as the Financial Markets Conduct Act 2013, would be required to analyse both the new Trusts Act and the relevant specific regulation to appreciate the complete regulatory environment.
The Commission intends to look at further areas of trust law in two later reviews, one on purpose trusts and charitable trusts, and one on statutory trustee companies and other corporates acting as trustees. As part of the Commission's corporate trustee review, the Commission will consider proposals relating to:
- the liability of directors of companies acting as trustees to creditors and beneficiaries;
- disclosure that a company is acting as a trustee; and
- a liquidator of a trust and other areas concerning the insolvency of corporate trustees.