Trustee House Insurance Obligations

How have the Christchurch earthquakes changed things for Trustees?

Following the Christchurch earthquakes, most insurers are no longer prepared to write full replacement insurance policies and instead now require that property owners nominate a 'sum insured value' for their insurance policies. This serves to cap the insurer's liability and financial exposure in the event of a substantial or total property loss.

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Trading Trusts: Are They For You?

Published in Inside Tourism, Issue 1002, 4 November 2014

We are often asked to explain the concept of a "trading trust" and its advantages and disadvantages for operating a business.

Essentially, a trading trust is a business operated by a company in its capacity as a trustee. The trustee company is operating the business for the benefit of the discretionary beneficiaries of the trust.

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Executors: What Do They Do And Who Should Be Appointed

One of the key decisions to be made when writing your will is who to appoint as executor. This choice is very important as it has ramifications for your beneficiaries and for the successful carrying out of your wishes under your will.

In short, the executor is your personal representative on your death, responsible for disposing of your body; proving the will and obtaining authority to administer your estate; paying your debts and distributing the estate. The effect of executorship is to grant the executor legal title to all your assets from the moment of death.

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What happens when things go wrong - Trustee liability for the actions of co-trustees

A recent Court of Appeal case has highlighted and reaffirmed three aspects of trusteeship:

1. A trustee is personally liable for trust debts;
2. A trustee cannot delegate his/her trustee duties; and
3. A trustee should ensure there is a system in place to ensure his/her co-trustees comply with their trustee obligations.

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Trust Duties - It Pays to Know the Trust Assets

One of the first duties a trustee has on taking up a trusteeship is to become familiar with the assets of the trust, looking at both what the assets are and their condition or state. It is a duty that may be overlooked when assets owned by the settlor of the trust are transferred to the trustees, sometimes to their detriment.

Trustees are personally liable when acting as a trustee. The exception to this is when trustee liability is specifically limited. Such limitation is normally limited to independent trustees. When entering into contracts or other obligations, trustees must ascertain what obligations and liabilities they are taking on before signing documents. Typically, trustees should take steps to limit their liability under the contract to the assets of the trust.

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Gift Duty Abolition - Not As Straightforward As It Seems

Last year the Government announced that it proposed to abolish gift duty from 1 October 2011. The abolition proposal was included in a bill introduced to Parliament in early December last year and is now law (The Taxation (Tax Administration and Remedial Matters) Act).

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