- Publish Date
- Friday, 27 January 2017, 11:15AM
- By Charlotte Lockhart
The recent nationwide survey of around 1,000 New Zealanders commissioned by Perpetual Guardian found that while four out of five Trustees are confident that they had done everything they needed to be compliant, a glaring inconsistency is that less than half were aware of recent changes to legislation.
The reality is that many Trustees are simply not keeping up-to-date with all the latest compliance requirements and law changes. TrustGuard – a Trustee compliance service offered by NZ Trustee Services and Perpetual Guardian – offers these five key things that every Trustee should know:
- Ignorance is no defence
Arguing that you were ignorant of aspects of your role, responsibilities and liabilities as a Trustee is no defence under the law – particularly if you are an independent Trustee. There are appropriate structures and limitations/indemnities that you can put in place to mitigate some of your personal liability. Know your obligations, understand the Trust Deed and ensure that you, as a Trustee, have sufficient protection in place.
- Doing the basics is important
Many Trustees are unaware that they are required to have annual meetings of the Trust and that a minute book of those meetings, with decisions, must be kept up-to-date. This includes maintaining up-to-date records of all correspondence, including cash books, lists of Trust property and capital and income accounts.
- Act independently
It is the duty of a trustee to have no personal conflicts of interest, to act impartially – even-handed – between beneficiaries of the Trust and in the best interests of the beneficiaries. Trustees should not profit personally from their role as a Trustee.
- Delegation is not an option
Unless by necessity or authorised by law or the Trust Deed, Trustees cannot delegate decision-making powers. Trustees must actively participate in their role and not rely on others, even Co-Trustees, to fulfil their obligations on their behalf.
- Your Trust may need an IRD number
From October 2015, changes to the Land Information and Offshore Persons Information Bill means that your family Trust most likely needs and IRD number if you buy or sell property through the Trust – you should be in possession of an IRD number well before any sale takes place.
The requirement to have an IRD number is just one small example of where changing legislation and court judgements will have an impact on the role and responsibilities of Trustees – consider taking professional advice to make sure you stay on top of your obligations as a Trustee.
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