Chapter 5
Trustees’ duties


5.1The duties that a trustee owes to beneficiaries are a key facet of the trust relationship. Currently there is little reference to trustees’ duties in trusts legislation.163 It is difficult to understand a trust without understanding trustees’ duties. Our intention with these recommendations is to improve the accessibility and clarity of the law. We propose that the new Trusts Act summarise and restate trust law in this area with specific details left to be governed by rules of equity. This chapter discusses our recommendations relating to:
5.2 The arguments regarding the reform options on these topics are discussed more fully in the Preferred Approach Paper164 and Fourth Issues Paper.165
163Sections 13B and 13C of the Trustee Act 1956 address the duty of prudence in relation to investments by trustees.
164Law Commission Review of the Law of Trusts – Preferred Approach (NZLC IP31, 2012) at ch 3.
165Law Commission The Duties, Office and Powers of a Trustee: Review of the Law of Trusts – Fourth Issues Paper (NZLC IP26, 2011) at chs 13.