Summary of recommendations
Chapter 4 – Characteristics and creation of a trust
R1 The new Trusts Act should:
(1)Provide that the new Act applies only to express trusts, but that the court may apply sections of the Act where appropriate to resulting trusts and constructive trusts.
(2)Provide that the characteristics of an express trust are:
(a) it is a legal relationship in which the trustee holds or deals with trust property on behalf of another person or persons (the beneficiaries) or for a purpose permitted at law;
(b) the trustee is bound by a fiduciary duty to deal with the trust property for the benefit of the beneficiaries or for the purposes of the trust;
(c) any beneficiary, or the Attorney-General in the case of a charitable trust, may enforce the trustee’s duties against the trustee;
(d) the beneficiaries have equitable rights in or in respect of the trust property; and
(e) a trust must not have the sole trustee as the sole beneficiary of the trust.
(3)Provide that an express trust may be created:
(a) by the settlor by words or actions doing the following (collectively known as “the three certainties”):
- identifying the beneficiaries, or permitted purpose; and
- identifying the trust property; or
- indicating an intention to create a trust;
(b) if a statute provides for the creation of an express trust, in accordance with that statute.
(4)Define the terms trustee, beneficiary, discretionary beneficiary, settlor and trust property for the purposes of the Act.
(5)Provide that a trust must satisfy all of the three certainties ((3)(a)) or be created under a statute ((3)(b)) if it is to be an express trust.
(6)Provide that nothing in the new Act affects any provision of Te Ture Whenua Maori Act 1993 or the jurisdiction of the Māori Land Court over trusts created under that Act.