Trust Law In NZ: What Every Trustee And Family Needs To Know

29 October 2026

Being appointed as a trustee of a family trust is a significant responsibility. In New Zealand, many people accept the role out of family loyalty without fully realising the personal legal duties and liabilities attached to it.

Under current New Zealand trust law, trust management is strictly regulated to ensure transparency and accountability. Whether you manage a long-standing family trust, a commercial trading trust, or a trust created under a Will, understanding your core legal obligations is essential to keeping your structure legally sound and protect assets.


Mandatory Trustee Duties: The Rules You Cannot Exclude


The law sets out five mandatory duties that apply to every trustee in New Zealand. These obligations are foundational—they cannot be modified, restricted, or written out of a trust deed under any circumstances.


  • Know The Terms Of The Trust: You must hold a copy of the trust deed and understand its operational rules.


  • Act In Accordance With Trust Terms: All decisions must strictly align with what the trust deed permits.


  • Act Honestly And In Good Faith: Decisions must be made with genuine, honest intentions at all times.


  • Act For The Benefit Of Beneficiaries: Your primary duty is to manage trust property solely to support the beneficiaries or further the trust's established purpose.


  • Exercise Powers For Proper Purpose: You must use your powers as a trustee only for the reasons they were originally granted.


Person reviewing and signing a trust deed at a desk with a coffee mug nearby

Default Trustee Duties: Rules That Can Be Tailored


In addition to mandatory obligations, trust law outlines ten default duties that will, unless excluded also apply. These represent standard rules for day-to-day administration, but unlike mandatory duties, they can be modified or excluded.


These default duties include:


  • Duty To Invest Prudently: Managing trust assets with proper care and skill, which duty can if you could be said to have any greater than normal ability, quite burdensome.


  • Duty Not To Self-Benefit: Refraining from using trustee powers directly or indirectly for personal gain.


  • Duty Of Impartiality: Treating beneficiaries fairly without unfairly favouring one individual over others (unless the deed explicitly allows it).


  • Duty To Act Unanimously: Ensuring all appointed trustees agree on decisions, rather than relying on a majority vote.


  • Duty To Hold Regular Meetings: Requiring an ongoing review of Trust matters.


  • Duty To Diversity: Requiring a spread of investments


Because many older trust deeds were drafted before modern compliance standards, reviewing your trust deed with a property and trust lawyer is essential to ensure you are not unwittingly exposing your self to claims from beneficiaries for breach of Trust and personal liability.


Beneficiary Information Disclosures


Trustees must proactively provide basic trust information to all beneficiaries.


Basic Trust Information Includes:


  • The fact that a person is a beneficiary of the trust.


  • The names and current contact details of all trustees.


  • Details regarding any appointment, removal, or retirement of trustees.


  • The beneficiary’s right to request copies of the trust deed or financial statements.


When Can Disclosure Be Restricted?


That said there are situations where one can withhold information where such is inappropriate for reason of:


  • The age and personal circumstances of the beneficiary.


  • Family harmony and whether disclosure could cause severe dispute.


  • Commercial or personal confidentiality.



  • The practicalities of contacting large groups of discretionary beneficiaries.


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Core Record-Keeping And Administrative Rules


Trust compliance requires active, ongoing administration. Leaving your trust in a drawer for years at a time creates legal vulnerability.


  • Holding Core Documents: As indicated above every trustee must as a minimum hold a copy of the original trust deed and any variations. It is no longer sufficient for say only the law firm to hold the documents.


  • Indemnity Limitations: Trust deeds cannot indemnify trustees against gross negligence, wilful misconduct, or dishonesty.


  • Maximum Trust Duration: The maximum allowable lifetime for a New Zealand trust is 125 years (increased from the legacy 80-year rule). Subject to certain rules, older trusts can be formally varied to take advantage of this extension.


The 39% Trustee Tax Rate: Active Management Is Essential


In addition to administrative compliance, financial management for family trusts requires close attention. With the trustee tax rate set at 39% for trustee income over $10,000, retaining unallocated income inside a trust can lead to higher tax liabilities.


Trustees should actively review distributions annually alongside their legal and accounting advisers to determine whether allocating income to beneficiaries in lower tax brackets is appropriate. 


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Does Your Family Trust Need A Health Check?


If your trust deed has not been updated in recent years, or if your trustees have changed without formal documentation, your structure may be exposed to legal challenge/ cause unforeseen complications.

A comprehensive Trust Health Check evaluates:


  • Whether your current trust deed complies with modern legal standards.


  • If your appointed trustees still wish to serve or need to be formally discharged.


  • Whether the trust continues to serve a genuine asset protection purpose for your family.


  • Whether the desirable supporting documents (ie appointing who takes what upon winding up) are in place.


Get Professional Trust Advice In Christchurch


Getting proper local guidance helps ensure your assets remain secure and your trustees stay fully compliant.

At Weston Ward & Lascelles Ltd, our Christchurch trust lawyers have been helping Canterbury families navigate trust administration, estate planning, and asset protection since 1883. We offer clear, plain-English advice tailored strictly to your circumstances.


Ready to review your family trust?



  • Visit Our Office: L1, 10 Leslie Hills Drive, Riccarton



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