Families At War – We Can Help

If you are a trustee, it is important that you understand your duties and get advice if you are in any doubt.

It is an often quoted fact that New Zealand has the highest number of trusts per capita in the world. Family trusts will typically have some family members as trustees and other family members as beneficiaries of the trust.  Unfortunately, this often means that disputes about how the Trust assets are being dealt with means disputes between family members. Being involved in any kind of dispute can be stressful. If it is a dispute between family members then it can be even more so.

We recently acted in a dispute between a brother and a sister. The sister was one of three trustees of a trust and her brother was one of the beneficiaries of the trust. The brother was upset about how distributions from the trust had been made and felt that he was not being treated fairly.  We acted for the trustee sister. Being involved in a dispute involving her brother was extremely distressing for our client on a personal level. Court proceedings were filed by the brother and it appeared that all parties would have to go through the expense and stress of a High Court hearing. Fortunately however we were able to reach a settlement using the Court’s dispute resolution process. This saved everyone money and hopefully means that brother and sister can start to rebuild their relationship.  

It is an unfortunate reality that with the growing number if family trusts in New Zealand there will be more and more disputes between trustees and beneficiaries. Traditionally the Courts in New Zealand have been very reluctant to interfere in the decisions of trustees. However with the increasing number of disputes being litigated the Courts are showing an increasing willingness to review decisions of trustees and hold them accountable.

If you are the beneficiary of a trust then the trustees of the trust have a duty to act in your best interests and the interests of your fellow beneficiaries when administering and distributing the trust assets. If you are trustee then it is important that you fully understand your duties as a trustee and get advice if you are in any doubt.

Contact the dispute resolution team at Gallie Miles at kirsty@gallie.co.nz or shelley@gallie.co.nz if you would like to discuss your options should a dispute arise in relation to your family trust.

Kirsty McDonald

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