Package includes:

Online CPD Module  l  Electronic booklet  l  PowerPoint Presentation

Package Fee (incl GST)

• $205 - NZLS members and Associate members
• $265 - Non-members

Note: Access to the online files is via your "My CPD" page. If you would like to purchase multiple packages, please contact us here.

Online CPD Module

Trusts often require substantial modifications to continue to be fit for purpose. Resettlement is not always an option, and many older trust deeds do not have suitable variation powers to effectively modernise a trust. This module will outline the process of varying a trust deed by application to the High Court under ss 122 – 125 of the Trusts Act 2019, including:

• When is this the best option?
• Whose consent do you need? What about recalcitrant beneficiaries?
• How extensive can the variations be? Can beneficiaries be removed? Can you add variation powers?
• Waiving consent under s 125 for remoter classes of beneficiaries
• Documentation – preparing deeds of variation conditional on court approval; who should be signatories
• Overview of the court procedure, appointment of external counsel, time involved, and cost.

Learning objectives

By completing this module you will:

• Have a clear understanding of what the court approved variations process can achieve, when it is likely to be an option for your clients, tricky preliminary issues to discuss at the outset (such as recalcitrant beneficiaries), what kind of documents to organise and enquiries to make, and, if the process is used, the usual time and cost associated with it.
• Be able to apply this knowledge to your practice and provide an overview of this option to your clients.

Electronic paper 

Authors: Sharee Cavanaugh, Greg Kelly, Kimberly Lawrence
Published: 7 March 2024
Pages: 15

Introduction

The Trusts Act 2019 has led many trustees to consider the efficacy of their existing trust deed and whether it is up to date and still fit for purpose. It is common for a trust to require substantial modifications in order to continue to be fit for purpose, and often trust deeds do not have variation powers – or, where they do, the variation powers are insufficient to effect the changes required. In that situation, it is possible to apply to the High Court under ss 122 and 125 of the Trusts Act 2019 to have a variation approved.

There are many situations in which it is desirable – or indeed, critical – that a trust be varied. Some of the most common include:

• Mirror trusts which were established many years ago and which often do not include the settlor as beneficiary;
• Trusts where the settlor is only an income beneficiary but it is desirable for the trustees to have recourse to capital for the settlor’s maintenance and support;
• Trusts with relatively short lifespans which will vest soon and therefore cause tax and/or creditor protection problems, or defeat asset planning or other property arrangements;
• Settlements where it is desirable to amend the terms of the trust to add or remove beneficiaries (perhaps removing spouses of children and grandchildren as beneficiaries of intergenerational trusts) or to change the nature of beneficial interests;
• Where the investment provisions or other aspects of the trust are no longer fit for purpose in light of the enactment of the Trusts Act 2019; and
• Often in conjunction with the above, trusts which cannot be resettled for tax reasons.

PowerPoint Presentation

These are the slides included in the presentation.