Individuals who open a trust in New Zealand are interested in protecting their assets, as well as guaranteeing their control. A family trust in NZ allows the founder to transfer the family assets as he/she sees fit, however, there are multiple uses to a correctly structured trust.
Our team specializing in company registration in New Zealand can also assist those who are interested in knowing more about trusts. Once you decide that this manner of protecting your assets is suitable for you, we can help you with setting up a trust in NZ.
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What are the parties to a trust in New Zealand?
A trust is set up by a party for the benefit of one or more parties. The following are involved:
- the settlor: the person who sets up the trust and places the initial assets; any person who transfers assets into the trust is the settlor;
- the trustee: one or more appointed persons who will manage the assets; the settlor entrusts them with this task; while the settlor can also act as a trustee, it may be advisable in some cases to appoint an unrelated party;
- the beneficiary: one or more individuals who will receive the assets of the trust; the settlor can add beneficiaries as he/she sees fit.
Our team can not only assist you if you want to open a company in New Zealand, but also if you want to set up a trust here. You can reach out to us for more information about the parties to a trust, their roles, and duties.
How do you use a family trust in NZ?
A family trust can be a useful tool to protect the assets of the said family. Some reasons why you can consider opening a family trust in New Zealand include the following:
- protect certain assets for your family members;
- make sure that the family’s business is transferred to the next generation;
- control how some assets are transferred, and to whom;
- more straightforward estate administration.
Some important issues to consider about the duration of a trust in New Zealand include:
- the new Trusts Act changed the maximum duration of a trust to 125 years;
- prior to the 2021 new Act, trusts had a duration of 80 years;
- trusts that were formed before the new law came into force may or may not be extended from 80 to 125 years; our New Zealand company formation agents can give you more details.
In addition to setting up a trust, we can also help you with dissolving a family trust in NZ. Ending a trust may be required for several purposes, and the manner in which this is accomplished can be detailed by one of our team members. If you already have a trust, and you wish to know more about dissolving a family trust in NZ, our team will answer your questions.
Who can use a charitable trust in New Zealand?
The charitable trust is used to protect money or assets that will be used (as the name suggests) for charitable purposes. The settlor is the one to decide what these purposes will be, and to what charity the fund will be donating its assets.
Common reasons to set up a charitable trust in New Zealand include the following:
- education promotion;
- religion promotion;
- poverty relief;
- other purposes that benefit the community.
Unlike a family trust, or a trust opened to protect the assets of an individual (and to control how these are distributed), the charitable trust must exist solely for charitable purposes.
The law governing these types of trusts in New Zealand is the Charitable Trusts Act. According to the regulations, a charitable trust has a trust board that follows the trust deed. Both the trust deed and the trust board are included in the Registrar for these trusts.
A charitable trust must be incorporated. Our team who can help you start a business in New Zealand can also help you set up a charitable trust.
Contact us if you want to know more about how to set up, change, or dissolve a trust in New Zealand.