Trustees and their obligations

We have written before on this topic. Sorry if it sounds like a broken record, but we are trying to be the fence at the top of the hill, rather than the ambulance at the bottom! If you know of anyone looking at becoming a trustee, we’d be more than happy to have a chat with them before they sign on the dotted line.
There are many risks involved in being a trustee particularly where the trustees have made bad decisions, or where loss is involved, or where the trustees have failed to discharge their duties diligently, and or failed to document properly their decisions and the rationale to support them.

There continues to be merit in a physical, annual meeting of trustees to review and record the affairs and key decisions of the trust.
Some trusts that were established many years ago are advancing towards either maturity or to a time when the trustees will change from parents to children. This is yet another review event and a time when the past decisions of trustees are likely to be challenged by beneficiaries.
Certainly there are many other challenging situations that arise in even the most passive trusts, usually being the ones that own your family home.
Further transactions as simple as interest rate fixing, building and resource consents and mortgage refinancing and asset sales and purchases are becoming more complex, involve more risk and time to consider properly.
We have for a number of years had to disclose to our professional indemnity insurers all trusteeships. Insurers are seeing this as an increasing area of risk and premiums are now significant.
For many years we have absorbed the time and costs involved in such engagements and simply added an allowance onto the annual fee where we continue to complete annual work for clients where any work was done in the previous period since our last annual bill.
This is less than transparent of us so commencing 1st August we propose to charge as follows for our services as a trustee. For all trusts that we are a trustee as at 1st August 2015, we will invoice $160 plus GST for the simple position of trustee and the risk that this entails.
On any transaction requiring our explicit involvement, we will bill time and cost or $150 plus GST, whichever is the greater.
We also recommend an annual meeting of trustees which will be charged at time and cost or $300 plus GST, whichever is the greater. For those trusts that we are aware are more actively investing, we will take the lead and arrange these meetings with you as part of the completion of financial statements or otherwise if we are not discharging that role for you.

If you don’t know where to begin, want to talk through something, or have a specific question but are not sure who to address it to, fill in the form, and we’ll get back to you within two working days.

  • This field is for validation purposes and should be left unchanged.