Family trusts have long been a cornerstone of asset protection, succession planning, and wealth management in New Zealand. For farming families, business owners, and property investors across Masterton, the Wairarapa, and Wellington, a family trust has traditionally offered peace of mind – protecting assets from relationship property claims, creditors, and future uncertainty.

However, changes in legislation, family dynamics, and financial circumstances mean that a trust set up 10 or 20 years ago may no longer achieve the protection or flexibility it was originally designed to provide. With the introduction of the Trusts Act 2019 and increased scrutiny from the IRD, it is now more important than ever to ask the question:

Is your family trust still fit for purpose?

Why Your Family Trust May Need a Review

1. The Law Has Changed – Trusts Act 2019

The Trusts Act 2019 introduced significant changes to New Zealand trust law, including new trustee duties around:

• Record-keeping
• Transparency
• Communication with beneficiaries
• Acting in accordance with the trust deed

Many older trusts were not drafted with these obligations in mind. Trustees who fail to comply could face legal risk, personal liability, or court challenges. A trust review ensures your structure aligns with the current legal framework.

2. Your Family Circumstances Have Evolved

Life changes can quickly make an old trust structure outdated. Common scenarios include:

• Divorce or remarriage
• Blended families
• Adult children forming relationships
• Business succession changes
• New grandchildren or dependents

If your trust no longer reflects your current wishes or family reality, assets could be exposed to unintended risk or dispute.

3. Cost vs Benefit Imbalance

Maintaining a trust involves ongoing costs, including:

• Accounting and tax compliance
• Legal advice
• Trustee administration
• Independent trustee fees (if applicable)

If you no longer operate a business or no longer need asset protection at the same level, you may be paying for a structure that provides minimal value. In some cases, winding up the trust may be more practical.

4. Outdated Succession Planning

A well-managed trust should clearly support your:

• Retirement planning
• Business or farm succession
• Intergenerational wealth transfer
• Estate planning goals

If trustees, beneficiaries, and distribution plans haven’t been reviewed recently, your succession strategy may be at risk.

Key Questions to Ask Yourself

• Why did we set up this family trust originally?
• Do those reasons still exist today?
• Are the current trustees appropriate and capable?
• Is the trust still compliant with the Trusts Act 2019?
• Are the beneficiaries and distribution powers still appropriate?
• Is the trust still achieving real protection or benefit?

What Can Core Legal Do For You?

At Core Legal Masterton & Wellington, we recommend reviewing your trust every two to three years, or whenever a major life event occurs. A professional trust review will help ensure that:

• Your trust aligns with your personal, business, and family goals
• All trustees understand and meet their legal duties
• The trust is valid, compliant, and well-documented
• Your assets remain properly protected
• Succession and estate planning are clear and effective

If a trust is no longer needed or effective, we can also advise on the safe and compliant wind-up of a family trust.

Talk to a Local Trust Law Specialist

As experienced rural and provincial legal specialists, Core Legal understands the unique challenges faced by farming families, landowners, and business operators in the Wairarapa and greater Wellington region.

If you’re unsure whether your family trust is still serving its purpose, now is the time to act.

Contact Core Legal in Masterton or Wellington to book your professional trust review and protect what matters most – the smart way.

Frequently Asked Questions (FAQ)

How often should a family trust be reviewed in New Zealand?
Ideally every 2–3 years, or after major life or financial changes such as marriage, separation, retirement, or business restructuring.

Does the Trusts Act 2019 apply to existing trusts?
Yes. All New Zealand trusts, including older ones, must now comply with the duties and requirements set out in the Trusts Act 2019.

Is it expensive to maintain a family trust?
Costs vary but usually include accounting, legal, and administration fees. If the trust no longer provides meaningful protection, it may not be cost-effective.

Can a family trust be wound up?
Yes, if certain conditions are met and proper legal steps are followed. A lawyer can advise whether this is appropriate in your situation.

Do I still need a trust if I’ve retired from farming or business?
Not necessarily. A trust review can determine whether other estate planning tools, such as a will or enduring powers of attorney, may now be more suitable.