Updated July 2026 | By Claire Endean, Director

A family trust is a legal arrangement where you (the settlor) transfer assets to trustees, who must manage them for the benefit of your chosen beneficiaries. New Zealand has one of the highest rates of trust ownership in the world, with hundreds of thousands of family trusts. A trust can still be a valuable way to protect assets and provide for your family, but the Trusts Act 2019 raised the bar for how trusts must be run, and a trust is no longer the right answer for everyone.

Who is involved in a family trust?

• The settlor: The person (or people) who sets up the trust and transfers the initial assets to it.

• The trustees: The people legally responsible for managing the trust's assets in the beneficiaries' best interests. Settlors are often trustees of their own trust, and an independent trustee such as a lawyer or accountant can add discipline and impartiality.

• The beneficiaries: The people the trust exists to benefit. Discretionary beneficiaries have a right to be considered for distributions; final beneficiaries are entitled to the trust property when the trust ends.

What did the Trusts Act 2019 change?

The Act, in force since January 2021, made trustee obligations explicit. Trustees must know and follow the trust deed, act honestly and in good faith, keep core trust documents, and hold trust property separately. Most beneficiaries now have a right to basic trust information, so a "set and forget" trust is no longer viable. Trusts can now last up to 125 years. If your trust was set up before 2021 and has not been reviewed since, a review is overdue.

Good reasons to have a family trust

• Protecting family assets for the next generation, including from future relationship property claims.

• Ring-fencing personal assets if you are in business or take on personal guarantees, subject to important limits: transfers can be challenged if made to defeat creditors.

• Providing for a family member who cannot manage their own affairs.

• Setting aside assets for a specific purpose, such as children's education.

When a trust may not be worth it

Trusts cost money to establish and run properly, and the compliance expectations are real. With the trustee tax rate aligned to the top personal rate, tax is rarely a good reason on its own. For some families, a well-drafted will and enduring powers of attorney do the job at a fraction of the cost. Honest advice about whether you need a trust is part of what you are paying for.

How Dawsons can help

We have advised East Auckland families on trusts for 60 years, from our Kohimarama and East Tamaki offices. Whether you are setting up a trust, reviewing an existing one against the Trusts Act 2019, or winding one up that has outlived its purpose, we will give you clear advice and upfront fees. Call 09 272 0002 or book online.

FAQs

How much does it cost to set up a family trust in NZ?

Costs vary with complexity. Expect setup fees plus ongoing costs for trustee meetings, record keeping and periodic reviews. We will quote before we start.

Do I still control assets once they are in a trust?

Not personally. The trustees control trust assets, and treating trust property as your own is the fastest way to have a trust attacked. This is why trusts must be run properly to work.

Can a trust protect assets from a relationship property claim?

It can help if established and run correctly, ideally before the relationship, but courts have several ways to look through arrangements that defeat a partner's rights. Pair a trust with a contracting-out agreement for the best protection.

Disclaimer: The information in this article is general information only and must not be relied on as legal advice.

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