When you’re dealing with property transactions, trusts, or financial arrangements in New Zealand, you may come across the term AML – Anti-Money Laundering.
Over recent years, AML laws have been extended beyond banks and financial institutions to cover lawyers, accountants, and real estate agents. That means more people are being asked for personal identification and documentation before certain transactions can go ahead. To illustrate what this means in practice, let’s look at George and Denise’s story.
A Family Trust And A Property Sale.
George and Denise had established their trust many years ago. It owned their family home and bach up north.
While they were up at the bach over the Christmas break, they decided that it was time to sell, so that they could free up some cash to spend more time travelling overseas. They decided to list the bach for sale with a local real estate agent.
When the real estate agent came to list the property, she asked who the other trustee was and for a copy of the trust deed. She said that this was for “AML” purposes. George and Denise had no idea what AML meant. The agent said AML stood for Anti-Money Laundering. New laws meant that she had to positively ID both George and Denise, their independent trustee and any named beneficiaries of their trust.
The new AML rules which have been in place for banks and other financial institutions for some time now apply to lawyers, accountants and real estate agents. More questions will be asked, and due diligence will need to be carried out on a greater number of people. If you have a trust, there will be greater requirements – the law talks about “enhanced due diligence”.
George and Denise’s other trustee was their long-standing friend, Dave. Dave was currently in Canada skiing for six weeks and wouldn’t be home until the end of February. Their trust had been set up before they had kids. When they looked at the trust deed, their nieces and nephews were also named as beneficiaries of the trust. As a result, the agent said she also had to obtain their photo ID and proof of address.
George and Denise were feeling slightly frustrated – all they wanted to do was to sell their bach, but it seemed like there was so much hassle before they could even list it.
How To Minimise AML Hassle.
While AML rules can feel frustrating, they are here to stay. To avoid unnecessary delays, it pays to:
Review your independent trustee
Are they accessible and easy to contact if needed?
Check your list of beneficiaries
You may not intend for some people to benefit. However, if they are listed, their details may still be required.
Taking time to tidy up your trust documents now can save headaches later.
Need Advice On AML And Trusts?
If you have a trust or are considering a property transaction, it’s important to understand how AML requirements could affect you. Our Trusts & Wealth Protection Team can provide tailored advice to make the process as smooth as possible.
Contact us today for guidance on AML compliance and protecting your wealth.