Talking trusts: Rose & Alister.

Rose and Alister had both been married before and had children from their previous marriages. However, they had been together for nearly 15 years and considered all of their assets to be joint.

They had set up a trust about ten years ago on the advice of their accountant to protect their assets from business risk – they owned a small engineering business which they both worked in. Their children were all adults now and while they were close to Rose’s two daughters, Alister’s son and daughter simply did not get on that well with Rose at all. Rose felt that they were greatly influenced by their mother.

Rose was very concerned as to what would happen if Alister died. She worried that his children would turn on her and that she would have claims made against the trust and Alister’s estate, as while all four children were to be treated equally, the intention was that no distributions would be made to children until both Rose and Alister had died.

It also seemed to Rose that Alister’s children always had their hands out and had the attitude that Rose and Alister had plenty of money. Rose was glad that most of their money was in the trust as she thought that would help to protect their assets from Alister’s children. However, she had heard about the new Trusts Act which was coming into force in January 2021 and felt very nervous as to how that would impact their trust.

Rose knew that after January 2021 beneficiaries would have a statutory right to more information about trusts including financial information, such as the assets, liabilities and income of the trust. 

She was worried that Alister’s children would learn what was in the trust and then make further demands on the trust’s resources. She went to see her lawyer to see what could be done.

Rose’s lawyer explained that she would need to review the trust deed to see if there was some way in which the deed could be amended to limit the information available to the children. She said every trust was different and that there was no blanket rule as to whether this could be done. She also suggested reviewing the memorandum of wishes for the trust to make sure that the settlors’ wishes were very clear as to what information is given to the beneficiaries.

Rose was relieved to know that while the trust landscape was changing, there were still measures that could be put in place to put her mind at rest.

 

Contact details:

Tammy McLeod, Trusts Team
tammy@davenportslaw.co.nz
09 915 4386

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