The New Zealand Trust Landscape:
What’s Changed Since 2019
The Trusts Act 2019 modernised trust law for the first time in 60 years.
Key updates include:
Mandatory trustee duties and stricter accountability
Enhanced disclosure to beneficiaries
Tougher compliance and documentation standards.
These reforms increased both the transparency and cost of running a trust. Combined with changes to property ownership rules, the bright-line property test, and rest-home subsidy assessments, the advantages of trusts have evolved — not disappeared.
When a Family Trust Still Makes Sense in 2025
1. Asset Protection
A well-structured trust can still shield family assets from:
Business risks: safeguarding personal wealth from company liabilities.
Relationship property claims: protecting assets acquired before or during a relationship.
Rest-home subsidy assessments: subject to strict gifting and look-back rules.
Important: asset protection only works if the trust is established before trouble arises.
2. Succession Planning & Intergenerational Wealth
Trusts provide long-term continuity by:
Avoiding probate and enabling smooth inheritance transfers
Allowing flexible distribution of assets over generations
Protecting inheritances for children from previous relationships
Giving parents ongoing influence over how and when assets are distributed.
3. Supporting Vulnerable or Dependent Beneficiaries
Trusts remain invaluable for families wanting to provide for dependants safely:
Protecting disabled or special-needs beneficiaries while preserving government entitlements
Preventing misuse of funds by financially irresponsible beneficiaries
Managing assets for those with addiction or mental-health challenges.
4. Business Succession Planning
For Christchurch and Canterbury family businesses, trusts help:
Transition ownership smoothly to the next generation
Keep business assets within the family
Balance fairness between children involved (and not involved) in the business.
5. Tax Planning Opportunities
While tax advantages are narrower than before, strategic benefits remain:
Distributing income to beneficiaries in lower tax brackets
Leveraging the available exemptions
Optimising Prescribed Investor Rates (PIRs)
Timing distributions for the best family-wide outcome.
The True Costs & Responsibilities of Trust Ownership
Under the Trusts Act 2019, trustees must:
Know and act on the trust’s terms
Act honestly and for beneficiaries’ benefit
Keep accurate, separate records
Manage trust property prudently
Ongoing administration typically includes:
Annual financial statements and tax returns
Documented trustee meetings
Legal and accounting advice for key decisions
Expect annual administration costs between $1,000 - $3,000+ plus GST (depending on complexity) for accounting and legal involvement in ensuring compliant operation.
When a Trust Might Not Be Necessary
Family trusts aren’t for everyone. They may not be worth it if you:
Have a simple estate or modest assets
Are a young professional without dependants
Prefer simplicity and low compliance over complex protection
Cannot maintain accurate trust records
How to Decide: Do You Still Need a Family Trust in 2025?
Ask yourself:
What am I trying to achieve?
(Asset protection? Family control? Tax efficiency?)
Can I meet the legal obligations?
Do the benefits outweigh the costs and complexity?
Is my existing trust still compliant and effective?
Why 2025 Is the Year to Review Your Family Trust
If your family trust was set up years ago, it may no longer suit your needs. A review should assess:
Whether your trust deed complies with the Trusts Act 2019
Whether trustees are meeting disclosure and record-keeping duties
Whether the trust’s assets and objectives still align with your goals
A poorly maintained trust can quickly become a liability, not a safeguard.
Canterbury Legal: Your Family Trust Experts in Christchurch
At Canterbury Legal, our Christchurch-based trust lawyers specialise in:
Establishing new family trusts
Reviewing existing trusts for compliance
Advising on succession, asset protection, and trustee obligations
Whether you’re considering setting up a new family trust or reviewing one that’s been dormant for years, our team will help ensure your structure is legally compliant, tax-efficient, and fit for purpose in 2025.
