Is your family trust still worth it?
Thousands of NZ trusts were set up for reasons that no longer exist. Some still earn their keep — the question is which kind you have.
What trusts still do well
Genuine asset protection from business and professional risk; managing assets for beneficiaries who can't yet (or shouldn't) hold them; succession planning across blended families; and keeping specific assets — the bach, the farm — intact across generations. If one of these is your real situation, a trust remains the right tool.
What they no longer do
The classic motivators have mostly evaporated: estate duty is long gone, gift duty was abolished in 2011, and residential-care subsidy planning faces aggressive look-through of gifting. Meanwhile the Trusts Act 2019 raised the bar: mandatory trustee duties, disclosure presumptions to beneficiaries, and real record-keeping obligations. A trust kept 'because the lawyer set it up in 1998' is all cost, no benefit.
The honest running cost
Annual accounting and any professional trustee fees, tax filings, formal minutes for decisions, and — since 2019 — the genuine administrative duty to hold core documents and consider disclosure to beneficiaries. Skimping isn't neutral: a trust run informally ('we never did minutes') is exactly the kind courts look through when it matters most, which defeats the purpose you kept it for.
Winding up, done properly
If the trust no longer serves a purpose, distribution and winding up is usually straightforward — but check the deed's power to bring forward the vesting date, get tax advice on any income/bright-line consequences, and document the final distributions. Half-abandoned trusts are worse than either alternative.
A trust question of your own?
Trustee duties, beneficiary rights, disclosure, winding up — ask in plain words, get an answer with the Trusts Act sections to prove it, plus draft letters. First question free.
Ask NZ Trust Answers →FAQ
Does a family trust protect the house from a relationship split?
Sometimes, partially, and less than people assume — relationship property law can reach trust assets in several ways, especially where the trust was funded during the relationship. Specific advice matters here.
What does the Trusts Act 2019 make trustees do?
Know and follow the deed, act honestly and for beneficiaries, hold core documents, and actively consider giving beneficiaries basic trust information — with a presumption in favour of telling them the trust exists.
Should we keep ours?
Describe your trust's assets, purpose and people to NZ Trust Answers — you'll get a keep/wind-up analysis grounded in the Act, with sections cited. First question free.
General information, not legal advice for your specific situation.
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