Trustees of private trusts in New Zealand will soon have a clearer idea of their obligations and duties after the Government agreed to back the introduction of a new Trusts Act.
But the Government has delayed its response to 50 other recommendations made by the Law Commission, saying further research is needed. The Government yesterday tabled a response to the first stage of a five-year-old commission review into the subject.
The first report, which focused on express private trusts, which benefit individuals, was delivered to the Government in September. It made 51 recommendations to modernise and clarify trust law.
Auckland lawyer Chris Patterson said the almost 60-year-old Trustee Act was not in step with how trusts were now used.
He said one of the areas of contention was under what circumstances trustees had to provide information to beneficiaries.
"The key word is accessibility ... certainly clarifying [the act] so that it should put it beyond doubt these obligations exist as opposed to having to work your way through different interpretations that different judges have had," Mr Patterson said.
Trust law needed to be revised as the use of trusts had grown greatly in the past 20 years, Mr Patterson added.
The Government estimated New Zealand had between 300,000 and 500,000 trusts operating.
Justice Minister Judith Collins said introducing a new Trusts Act would make the law clearer and more accessible to individuals and businesses.
"This is a sensible and practical move, especially as the current act is more than 50 years old, and the importance of ensuring trust law meets the needs of those involved."
While the Government agreed with the need for a new Trusts Act, it advised more work was needed on a host of recommendations, including how a new act would apply to existing trusts, before it could form a final view.
The Ministry of Justice will look at the implications of a new act, as well as the commission's 50 other recommendations, before reporting back to the Government.
Stage two of the review will cover charitable and purpose trusts, while stage three will look at company trustees.