Beneficiaries have the right to request additional information from the trustees, which may include details of the assets, distributions and loans made by the trust and to whom. This could be of some importance for territorial start-ups that have not yet been made available to beneficiaries. There are a number of cases where trustees may reject the application or limit the information provided – as a trustee, you must consider the requirements placed on your trust and seek advice accordingly. 1. the likelihood or non-probability that the beneficiary will receive trust assets in the future, including the nature, extent and extent of the beneficiary`s interest in the trust; The new Trusts Act 2019 (the Act) comes into force on January 30, 2021. The Act updates and improves the Trust Act for the first time in more than 60 years. It applies to all existing trusts in New Zealand as well as all trusts established on or after January 30, 2021. With the move to the 39% tax rate for individuals, transactions between individuals and trusts will be scrutinized. These include strict new disclosure rules designed to ensure that the tax office has a clear overview of these transactions, whether taxable or not. Although a trust is usually given a name and is often referred to as if it were a separate entity, such as a corporation, this is not the case. A trust is a relationship between trustees and beneficiaries that imposes an obligation on trustees to manage the assets of the trust in the interest of the beneficiaries. “For a long time in New Zealand, it would be fair to say that many trusts, I would say, have operated with what some have called a veil of secrecy or a shroud of secrecy.
The law explains the nature of a trust and the role of a trustee in clear and modern language. Trustees were the legal owners of a trust`s assets and were also responsible for determining how those assets were managed and who received benefits from those assets. The amendments to the law meant that it would be easier for beneficiaries to challenge trustees` decisions because of the tightened disclosure rules. “New Zealanders are big fans of confidence. This is a big change that will affect many New Zealanders,” said Timothy Orr, legal partner at Martelli McKegg, adding that most trusts have a number of beneficiaries. If the tax office looks at the tax return submitted for 2022 and finds something concerning, it has the right to request the same information for the last eight years. We recommend that trustees review the required reports for 2022 as soon as possible to determine what information needs to be collected and what the result will look like when viewed through the lenses mentioned here. And for those who haven`t kept good financial records, now is the time to update them. Trustees are expected to provide basic information about the trust to ALL beneficiaries (or their representative). This information includes: Given the increased obligations imposed on trustees by New Zealand law, CAs have had to question their participation in trusts.
Similarly, all income from trust assets is usually trust income and not the trustee`s income. Transferring assets to the trust may also affect your eligibility for the Residential Care Grant. You should assess whether a trust is an appropriate way to achieve your goals. You should weigh the pros and cons of your various options, including ongoing compliance costs for management. Your lawyer can help you determine what is needed to meet your needs. You should speak to a lawyer to ensure that the terms of your trust fully meet your needs, serve the intended purpose, and are not frustrated by the collection provisions. 9. Any other factor that the syndic considers reasonably relevant to determine whether the presumption is correct. Trustees are the owners of the property and can do the same things with the property that the owners can do.
They can hold property, take out mortgages, hold bank accounts, and generally hold all kinds of assets and investments as long as they operate in accordance with the powers set out in the trust deed. If you want to create a trust, it is important that you understand your trust and know what trustees can and cannot do before you create it. Check with a lawyer to see what kind of trust you need. Typically, trustees decide which payments should be made from the trust`s income or capital and which beneficiaries they receive. There are other mandatory obligations that must be complied with, including the retention of basic documents, the provision of information to beneficiaries and the provision of information to beneficiaries upon request. Default obligations (may be “outsourced” in the terms of the trust deed)A trustee must: Trustees must also be aware of the terms of the trust and act in accordance with the terms set out therein. This means that ALL trustees are required to have a copy of the fiduciary documentation. .