Help
We've tried to cover off a good range of questions relating to trusts in general. If after reading the below you still have further questions, please email us at trust.specialist@trustus.co.nz.
Are the trustees liable for the debts of the trust?
Yes, it is common for discretionary trusts to have debts. If these debts are owned by the trust they are taken on the names of the trustees, and if the obligations are not limited to the trust, the trustees are personally liable.
Are trusts just a fad?
Trusts have been around for centuries and it is estimated that there are over 500,000 family trusts in New Zealand.
Over the years there have been law and rule changes that directly affect trusts but they still remain an effective means of protecting assets.
Can you alter the terms of a trust you have established?
Yes, the terms of the trust can be changed, altering the powers of the trustees, adding beneficiaries or changing any of the terms of the trust.
However there are limits and restrictions which are stated in the trust deed.
There are a number of ways trusts can be changed:
Any assets of a trust can be resettled into another trust.
There may be an existing clause that allows the settlor to vary the trust.
If all the parties (settlors, trustees and beneficiaries) agree to an amendment.
The High Court can also be approached to amend a trust.
Can I be a settlor and a beneficiary?
Yes, you can and you are also able to be a trustee. It is important however to make sure that, if you are a single person setting up a family home trust, you have an independent trustee.
This will reduce the risk of your trust being viewed as being established for inappropriate use.
Can you change the beneficiaries of the trust?
There is a clause written into the trust deed that gives the settlor the right to add further beneficiaries.
This clause caters for new shareholders.
Can I close down the trust early?
Yes, the trust deed has a clause that allows the trustees to wind up the trust and distribute the assets whenever they want.
Please note, the trust can not continue beyond the perpetuity period which is usually 80 years.
Can you get rid of a trustee and appoint a new one?
The trust deed gives the settlor the power to fire existing trustees and to appoint new ones. The Trustee Act also allows the removal of a trustee who:
- Is incapable of acting,
- Has committed a crime or breach of trust,
- Has stayed out of New Zealand for 12 months or more, or
- Refuses to act.
Can you add other assets to the trust after it is set up?
The insurance trust has been designed to predominantly hold nominated beneficiary rights of insurance policies of shareholders of the company.
We would suggest that you do not transfer other assets to the insurance trust.
Does the trust need a bank account?
No, not if the trust has no income and makes no payment for expenses.
InsureUs however do suggest having your trustee (Accounting Firm) set up a bank account for your trust to establish the transfer of the $150 to create an audit trail showing the establishment of the trust.
How long can a discretionary trust last for?
Our trust deed states that the trust can last for up to 80 years from the day it is set up.
This is the maximum number of years a trust is allowed to last under the Perpetuities Act.
The trustees may have the power to end the trust earlier if the trust deed allows it.
