Contents

Chapter 3
The new Trusts Act

Tables

3.66Table A shows those of our recommendations that are based on existing case law, rather than statute law, and classifies them according to the way in which we intend they will interact with the existing case law.

Table A: Interaction of recommendations with case law
Restate case law principles in statute
R number Description of recommendation
R1 Characteristics and creation of a trust
R2 Mandatory duties of a trustee
R3 Default duties of a trustee
R5 Retention of information by trustees
R13 Standard of care for trustees
R24 Power to appoint and remove a trustee
R29 Variation and revocation by beneficiaries
R46 Appointment of a receiver for a trust
R47 Trustees’ right to indemnity
Modification to case law in new Act, but case law will remain relevant
R number Description of recommendation
R4 Trustees’ exemption and indemnity clauses
R6 Provision of information to beneficiaries
R42 Alternative dispute resolution
Significant modification to case law in new Act and current case law will no longer be relevant
R number Description of recommendation
R15 Distinction between capital and income
R16 Apportionment of receipts and outgoings
R48 Creditors' claim through trustee's indemnity
R49 Maximum duration of trusts

3.67Table B shows the recommendations that are based on or adapted from provisions of the current Trustee Act, and classifies them according to the extent that they adapt the existing statutory provisions.

Table B: Interaction of recommendations with statute law
Modernise and/or clarify existing statutory provision
R number Description of recommendation
R14 Investment powers and duties
R18 Acceptance and rejection of trusteeship
R25 Number of trustees
R27 Custodian trustees
R28 Advisory trustees (special trust advisers)
R31 Extension of trustees’ powers by the court
R33 Applying for directions of the court
R34 Payment of a commission to a trustee
R35 Beneficiary indemnifying trustee for a breach of trust
R36 Barring of claims
R37 Payments to the Crown
R38 Distribution of shares of missing beneficiaries
R39 Protection against creditors by means of advertising
R44 Application for audit of accounts
Modification of existing statutory provision in new Act
R number Description of recommendation
R7 Powers of a natural person
R8 Powers of maintenance and advancement
R9 Age of majority
R10 Power to appoint agents
R12 Power to delegate
R20 Grounds for removal of a trustee
R21 Who may remove a trustee and appoint a replacement
R22 Replacing a trustee who has died
R23 Replacing a trustee who retires
R26 Transfer of trust property
R30 Revocation and variation by the courts
R32 Reviewing decisions of trustees
R40 High Court and District Court jurisdiction
R41 Family Court jurisdiction
R43 Public Trust
Brand new statutory provisions
R number Description of recommendation
R11 Power to appoint nominees and custodians
R17 Investment managers
R19 Who may be a trustee

3.68Table C sets out and categorises the transitional arrangements for each of the recommendations for provisions in the new Trusts Act.

Table C: Transitional arrangements for new Trusts Act for each recommendation
General rule − Reform applies to existing trusts from the date of enactment
Applies to all recommendations, other than those included below.
Reform applies to existing trusts from date of enactment (as with the general rule), but with specific modifications
R number Description of recommendation Description of modification
R12 Power to delegate New requirements do not apply to existing delegations
R15 Distinction between capital and income for investment purposes Mandatory for existing trusts; default for new trusts
R16 Apportionment of receipts and outgoings Mandatory for existing trusts; default for new trusts
R17 Investment managers Subject to trust terms prohibiting this
R29 Revocation and variation by beneficiaries With transitional arrangements for proceedings commenced under current variation provisions
R30 Revocation and variation by court With transitional arrangements for proceedings commenced under current variation provisions
R31 Extension of trustees’ powers With transitional arrangements for proceedings commenced under current variation provisions
R32 Reviewing decisions of trustees Only to actions or omissions that occur after the new Act in force
R33 Applying to court for directions With transitional arrangements for proceedings commenced under current provisions
R34 Payment to trustee With transitional arrangements for proceedings commenced under current provisions
R35 Beneficiary indemnifying trustee With transitional arrangements for actions by trustees already taken under current provisions
R36 Barring claims With transitional arrangements for proceedings commenced under current provisions
R37 Payments to the Crown With transitional arrangements for actions by trustees already taken under current provisions
R38 Advertising for missing beneficiaries With transitional arrangements for actions by trustees already taken under current provisions
R39 Advertising for creditors With transitional arrangements for actions by trustees already taken under current provisions
R48 Creditors’ claim through trustee's indemnity Only to transactions entered into after commencement of new Act
R49 Maximum duration of trusts Applies to all trusts but vesting/termination dates in existing trust deeds will continue to apply
Reform applies to existing trusts after transitional period (2 years)
R number Description of recommendation
R4(1)(a)–(b) Exemption and indemnity clauses
R6 Provision of information to beneficiaries
R7 Administrative powers
R8 Powers of maintenance and advancement
Reform does not apply to existing trusts or trust terms
R number Description of recommendation
R4(1)(c)-(d) and (2) Informing settlor regarding exemption clauses