5.38The intention of this recommendation is to make it clear to trustees that trusteeship requires the exercise of responsibility for significant records. Including a provision regarding the retention of documents by trustees was well supported by submitters. Several submitters suggested the list of documents that should be retained should expand. The list has been adjusted as a result to include documents not already covered that are of significance to the management of a trust (see draft clauses 33 to 37 below).
5.39It has also been suggested by a few submitters that the provision should place a limit on the period of time that a trustee is required to retain the documents because retention of all documents for the full duration of the trust may be unduly burdensome. Seven years and 20 years were suggested durations. However, both are potentially too short given the duration of trusts and the likely timeframe over which decisions are made. The proposal has been altered to make it clear that documents should be retained for the duration of the trust.
5.40It was noted in submissions that the proposal did not create an obligation for retiring or removed trustees to pass on documents to new trustees or for new trustees to retain them. This gap could lead to an incorrect understanding that when a trustee leaves the office the trust documents may be discarded.
5.41We were also urged to address the issue of whether one trustee can hold documents on behalf of other trustees. We consider that it is reasonable for one trustee to be able to hold the trust documents on behalf of others, although this would not be necessary. However, every trustee should hold a copy of the trust deed and any variations to it.
5.42We want to address the concern that some trustees may see this list as all the documents they will ever need to retain. We want to make the intention clear that this list represents the minimum number and type of documents that may need to be retained depending on the nature of the trust.
5.43Inland Revenue has submitted that it would be useful to include a provision indicating that trustees may have record-keeping requirements under other legislation. We have included this in the indicative draft clauses.
5.45These provisions should apply to all trusts including those created before the introduction of the new Act. The requirements in this recommendation should represent what trustees are already required to do. Because the retention of documents obligation is subject to a reasonableness requirement we do not envisage that this will create hardship for trustees.