Family Trusts & Asset Protection
A Family Trust is a powerful legal structure designed to protect your personal assets, shield family wealth from business creditors, and secure your generational legacy in compliance with the Trusts Act 2019.
Book a Trust Vetting ConsultationTrusts Act 2019 Alert
The Trusts Act 2019 introduced sweeping transparency changes. Trustees must now proactively notify beneficiaries of their status and share key trust documents.
Explore Our Detailed Trust Guides
Family Trusts In-Depth
A comprehensive guide to trust structuring, the role of Settlors, Trustees, and Beneficiaries, ongoing administration duties, and compliance under the Trusts Act 2019.
Asset Protection & Tax Structuring
Explore advanced asset shielding, tax planning covenants, business restructuring, Look-Through Companies (LTC), and creditor protection strategies.
We need Trust and Asset protection
Why Establish a Family Trust in New Zealand?
1. Creditor & Business Protection
For business owners, sole traders, or company directors, a Family Trust holds the family home separately from personal liabilities, shielding it from future business insolvencies or claims.
Creditor Shielding2. Relationship Property Protection
Coordinating trusts with Contracting Out Agreements (prenups) prevents family assets and inherited properties from being split 50/50 under the Property (Relationships) Act 1976.
Relationship Claims3. Generational Legacy
Assets remain in the trust after a settlor's death, avoiding probate administration delays and ensuring assets are managed responsibly for grandchildren or minor heirs.
Generational TransfersTrusts Act 2019: Mandatory vs. Default Trustee Duties
The Trusts Act 2019 divides trustee obligations into two distinct categories. **Mandatory duties** must be followed and cannot be changed, whereas **default duties** apply unless modified by the trust deed:
| Mandatory Duties (Cannot Be Modified) | Default Duties (Can Be Modified by Deed) |
|---|---|
| **Know the Terms of the Trust**: A trustee must understand the trust deed covenants and rules. |
**Duty of Care**: Exercise the care and skill reasonable in the circumstances. |
| **Act in Accordance with Terms**: Must administer trust assets strictly as the deed instructs. |
**Duty to Invest**: Invest trust funds prudently, maintaining asset values. |
| **Act Honestly and in Good Faith**: Fiduciary duty to act honestly in all transactions. |
**Not to Profit**: Trustees must not make a personal profit from trust operations. |
| **Benefit of Beneficiaries**: Must manage trust assets solely for the benefit of beneficiaries. |
**Act Unanimously**: All trustees must agree on decisions (unless deed allows majority). |
| **Exercise Powers for Proper Purpose**: Trustee powers must only be used as intended. |
**Regular Reporting**: Trustees should provide financial accounts to beneficiaries. |
The Trust Establishment & Asset Transfer Process
Setting up a Family Trust and executing the legal transfer of assets (conveyancing) involves five key phases:
| Phase | Key Legal Action | Documentation Executed |
|---|---|---|
|
Phase 1 |
Initial Consultation & Vetting |
Inventory of personal assets, identify beneficiaries and trustees. |
|
Phase 2 |
Trust Deed Drafting |
Drafting trust deeds with customized appointor and trustee clauses. |
|
Phase 3 |
Deed Execution |
Signing and witnessing of the final Trust Deed by Settlor and Trustees. |
|
Phase 4 |
Conveyancing & Asset Transfer |
Transferring real estate titles to trustees (LINZ registrations) or assigning shareholdings. |
|
Phase 5 |
Annual Trust Administration |
Filing annual IRD IR6 tax returns, preparing financial accounts, and record-keeping. |
Establish or Review a Family Trust with Ian Mellett
Coordinate your asset protection strategy, review your existing trust deeds, and ensure full compliance under the Trusts Act 2019. Request a quote today.
Request a Trust QuoteFrequently Asked Questions
Yes. It is common in New Zealand for the Settlor (the person establishing the trust) to also act as a Trustee (managing the assets) and a Beneficiary (receiving trust distributions). However, to maintain the trust's credibility and avoid "sham trust" claims by creditors, we strongly advise appointing at least one independent Trustee (such as your solicitor or accountant).
The upfront cost to draft a customized trust deed and settle the trust typically ranges from $1,800 to $3,500, depending on complexity. Transferring properties to the trust involves standard residential conveyancing fees. Ongoing annual administration costs (for accounting, tax returns, and trustee meetings) typically range from $1,000 to $2,500.
Gift duty was completely abolished in New Zealand in October 2011, meaning you can transfer assets of any value to your trust without tax outgoings. However, you should still execute formal deeds of gift to document transfers. Furthermore, you must review your trust to satisfy the newer Trusts Act 2019 transparency requirements.
Instruct Quay Law for Your Transaction
Contact our Remuera office to discuss your sale or purchase contract, title checks, or financing arrangements.