The Trusts Act 2019 replaced the Trustee Act 1956 and came into force on 30 January 2021.
The Trusts Act covers all aspects of trust law, but it has some provisions that are particularly relevant to transfers of trust property by trustees.
Our Using A&I forms for trusts page has further information on:
- Which A&I form to complete and who should sign
- Signing under a power of attorney
- Verifying the identity of the signatories
- Transferring trust property
- Transmissions where a trustee has died
The Trusts Act 2019 introduces a new process for vesting land held by trustees if a retiring or removed trustee is unable to sign transfer documentation.
Under the Act, the execution of a document that changes trustees vests the trust property, “without any conveyance, transfer, or assignment” (s116(2)(b)). However, under s117 the vesting of land will not take effect until a transfer instrument is registered under the Land Transfer Act 2017 (LTA). This means when trustees retire or are removed and new trustees are appointed, a transfer must be registered to change the ownership of the trust’s land, just as under the prior Trustee Act 1956.
The vesting of land under s 116(2) of the Act is not a transmission for the purposes of s 87 LTA, or a statutory vesting under s 90 LTA.
If a trustee is removed and cannot sign an Authority and Instruction (A&I) form for a transfer instrument, for example because they are incapable or refuse to do so, the new and continuing trustees will be able to do so on their behalf (s118(2)). A copy of the document removing the trustee and a statutory declaration that it was validly executed will be sufficient proof of the right to sign on behalf of the removed trustee. You can find an example of a suitable statutory declaration at the bottom of this page.
These will need to be retained by the certifying practitioner with the signed A&I form and must be provided to LINZ if the transaction is subject to an e-dealing compliance review. More information about this is found on the Using A&I forms for trusts page:
The High Court is still able to appoint and remove trustees and vest land by court order (s 116(5)).
The new provisions regarding vesting land are subject to the transitional provisions of the Act. That means that this process is only available to give effect to removals/appointments that are completed after the Act comes into effect. If the change of trustees document was signed before 30 January 2021, Schedule 1, Part 1, clause 11 states that the divesting/vesting must be completed as if the Act hadn’t commenced.
If a trustee dies, trust property vests in the surviving trustees by survivorship. If one of the surviving trustee is incapable of performing their functions and has been removed as a trustee, the capable trustee/s can use the same provisions in the Act to register a transmission by survivorship.
The capable trustee/s can register a transmission on behalf of the incapable trustee and for themselves, under section 118(2) of the Trusts Act 2019, along with registering a transfer to complete the divesting and vesting of trust property on removing the incapable trustee under sections 116 & 117 of the Act.