Understanding Fiduciary Duties: A Position Of Trust In New Zealand

What You Need To Know...

• High Responsibility: Accepting a role as a trustee, executor, or attorney under an Enduring Power of Attorney (EPA) introduces strict legal obligations.

• Core Obligation: Fiduciaries must act with absolute honesty, loyalty, and in the best interests of the people they represent, ahead of their own.

• Personal Liability: Breaching these duties can lead to severe financial consequences, court compensation orders, or removal from the role.

• Local Support: The Private Client team at Weston Ward & Lascelles provides practical legal guidance to safeguard Christchurch trustees and families.

Whether you have been asked to step up as a trustee, an executor of a Will, or an attorney under an Enduring Power of Attorney (EPA), accepting a fiduciary role means taking on significant legal responsibilities.

These positions require far more than simply managing someone else’s day-to-day paperwork. They demand absolute honesty, uncompromised loyalty, and a legally binding commitment to acting entirely in the best interests of others.

At Weston Ward & Lascelles, we regularly advise Christchurch and Canterbury clients who have been appointed to these vital positions. Understanding your legal responsibilities from the very outset is the best way to avoid costly mistakes, family tension, and long-running legal disputes.

What Are Fiduciary Duties?

A fiduciary duty arises whenever one person is legally entrusted to act in the interests of another. The law holds fiduciaries to an incredibly high standard. You are required to act honestly, loyally, and in good faith, always putting the interests of the person or people you represent completely ahead of your own personal gain.

Fiduciary duties commonly apply to:

• Trustees managing family trusts.

• Executors and administrators handling deceased estates.

• Attorneys acting under an Enduring Power of Attorney (for property or personal care and welfare).

• Company directors and certain other professional corporate roles.

Although your specific daily tasks will differ depending on the exact nature of your appointment, the central legal principle remains exactly the same: you must exercise your powers responsibly, transparently, and solely for their proper, lawful purpose.

Key Responsibilities Of A Fiduciary

If you are acting in a fiduciary capacity within New Zealand, the courts generally expect you to meet these core obligations:

• Act Honestly And In Good Faith: Every decision you make must be transparent and well-intentioned.

• Avoid Conflicts Of Interest: You must never allow your personal interests or outside relationships to collide with your legal responsibilities.

• Zero Unauthorised Personal Benefits: You cannot use your position to pocket secret profits or gain unauthorised advantages from the estate or trust assets.

• Exercise Care And Skill: You are legally required to exercise reasonable care, prudence, and professional skill when making financial or personal decisions.

• Maintain Accurate Records: You must keep pristine financial records and properly account for every single dollar and action you take.

These obligations ensure that beneficiaries, family members, and interested parties are treated with absolute fairness, and that assets are protected from mismanagement.