The current 'lockdown' is unprecedented.
In times like these your first priority is to ensure you take care of yourselves, friends and family. However, while it is important to protect those close to you, you should also give consideration to the protection of your assets. Accordingly, it may be an opportune time to review your current estate planning to ensure everything is 'as you would like' and, if you have a trust, to make sure that it aligns with the provisions of the Trusts Act 2019 ("the Act") which was enacted this year but comes into force at the beginning of 2021.
There are several key provisions of the Act that will require your consideration and understanding.
The Act is ultimately aimed at making trust law more accessible to both lawyers and the public and at the same time providing beneficiaries the ability to hold trustees to account by establishing key Trustee duties. This will be supported by all trusts having to be administered consistent with the terms and objectives of the Act and to ensure unnecessary costs and complexities are avoided. There is also a general attempt to minimise out-dated language and introduce new dispute processes.
There has been and continues to be a debate around the efficacy of trusts as well as an increase in instances of Trustees failing to discharge their obligations adequately in their capacity as a trustee. Trustees should not lose sight of the fact they are personally liable for the trust's liability eg tax or GST! The Act provides both trustees and beneficiaries with an explanation as to trustee obligations and at the same time provides guidance on how to better streamline trust principles.
Some key changes the Act will bring in January of 2021 are as follows:
Those who do have trusts in place should make sure that they are aware of these imminent changes and have prepared accordingly. We are happy to help those who wish to 'revisit' their current trust deed and set up to see that they sit comfortably within the Act's provisions.
All McVeagh Fleming staff are now working remotely during the mandatory four-week lockdown period. We are happy to assist you in any trust-related matters and help you ensure that your trust deed complies with the new legal changes coming in under the Act in January 2021.
Please stay safe and look after yourselves during these difficult times.
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© McVeagh Fleming 2020
This article is published for general information purposes only. Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice. If you require specific legal advice in respect of any legal issue, you should always engage a lawyer to provide that advice.