The Benefits and Challenges of Trusts
13 April 2025

How an Independent Professional Trustee Could be of Assistance

Trusts have long been a popular tool for managing and protecting assets. They offer various benefits, especially for those who own their own business or want to ensure their assets are protected. However, there are also some drawbacks to consider. Here, we'll explore both the benefits and the cons of setting up a trust, helping you decide if it's the right option for you. 

 

Benefits of Trusts 

  1. Asset protection: Trusts are particularly beneficial for business owners, as they protect personal assets from business risks and creditors. By placing assets in a trust, you can shield them from being drawn down to pay personal debts or from relationship property claims. This ensures that your personal wealth remains secure, even if your business faces financial challenges. 
  2. Tax efficiency: Depending on your situation, trusts can offer tax efficiencies. However, it's essential to speak with an accountant to understand how a trust can impact your tax obligations. A well-structured trust can help minimise tax liabilities and maximise the benefits for your beneficiaries. 
  3. Estate planning: Trusts play a crucial role in estate planning. They ensure that your assets are distributed according to your wishes after your passing. However, it's essential to consider if other instruments like wills, enduring powers of attorney (EPOAs), or specific ownership structures might be better suited for your needs. 
  4. Serving certain family dynamics: Trusts can be tailored to serve specific family dynamics, ensuring that assets are retained for family members who may need them the most. This includes providing for those with disabilities, rest home care, or hospital care. A trust can help ensure that your loved ones are cared for, even if you are no longer around. 


Cons of Trusts 

  1. Loss of control of assets: When you set up a trust, the assets are no longer considered your personal assets. They belong to the trust, and the trustees have decision-making control over them. This means you need consensus decision-making from all trustees, and the assets are governed according to the powers outlined in the trust deed. 
  2. Ongoing administration and costs: Trusts require ongoing administration, including maintaining records, fulfilling disclosure obligations, filing tax returns, and complying with legal requirements. This can be time-consuming and costly, which might be a downside unless there is a good reason for having a trust. 
  3. Tax implications: While trusts can offer tax efficiencies, they also come with tax implications. It's essential to understand these implications and seek professional advice to ensure compliance with tax laws and regulations. 
  4. Legal challenges: If a trust is not administered properly, it can face legal challenges. This can result in disputes among beneficiaries or questions about the validity of the trust. Proper administration and adherence to legal obligations are crucial to avoid such issues. 


Independent Professional Trustees  

Appointing an independent professional trustee such as accountants or lawyers (including one of Willis Legal’s Trustee Companies) for your Trust can offer several desirable benefits.


Such benefits include: 

  1. Transparency and Independence: Appointing an independent trustee can ensure that the trust’s assets are managed, and decisions affecting assets are made, in a totally independent manner. This gives the Trust integrity and can provide beneficiaries with peace of mind. This can be particularly important when family or business dynamics are complex or strained. Independent trustees can also help to avoid or negate any perception of a ‘sham trust’. 
  2. Stability over time: Private trustees might lose their ability, willingness or capacity to act as trustee over the life of the Trust. However, professional trustee companies provide longevity, consistency and stability. The costs of retiring trustees unable or unwilling to act and appointing new trustees can be reduced, particularly over time. 
  3. Knowledge and expertise: Professional trustees hold the up-to-date and best practice information on New Zealand Trust legislation. This knowledge and expertise encourages strong compliance with the Trusts Act 2019 as well as proper administration and record-keeping.  The knowledge and advice gained from having a professional trustee included can assist other trustees with decision-making regarding the trust’s assets and administration. 


Overall considerations 

When deciding whether to create a new trust, it's essential to have a specific and good reason. One of the benefits listed above should outweigh the cons. It's also crucial to speak with a lawyer to assess if a trust is the right vehicle to achieve your objectives and tailor it to your individual circumstances. For example, transferring assets into a trust could potentially affect your eligibility for residential care subsidies. Therefore, professional advice is vital before making any decisions in relation to trusts. 


We encourage settlors (creating a new Trust) or continuing trustees who are appointing any new Trustees, to consider whether an independent professional trustee might be beneficial. As outlined above, there can be significant advantages to having an independent professional trustee included.


Willis Legal provides its own independent professional trustee service, ask about it today.


If you believe that creating a Trust might be of benefit to you, your family or business and/or if you are interested in including an independent professional trustee – please do not hesitate to contact one of our friendly staff and we would be happy to discuss this with you in further detail.   

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5 July 2026
We're pleased to shine a light on Harry Calcott, a solicitor in our Property Team. If you've worked with Harry Calcott , you'll know he has a knack for making complicated processes feel straightforward. As part of our Property Team, based in our Hastings office, Harry guides clients through some of the biggest moments of their lives, and he brings genuine care to every step of the way. Although, Harry didn't set out to be a property lawyer. The plan, when he graduated with his Bachelor of Law and Commerce, was criminal law. He spent time as a law clerk with the Public Defence Service, a grounding experience that gave him an early look at the realities of legal practice, but somewhere along the way, something shifted. "I realised I was drawn to helping clients through positive milestones rather than difficult disputes," he says. The work of guiding people through important life events, buying a home, planning for the future, felt more like where he was meant to be. His commerce background turned out to complement property law naturally, and what might have looked like a change of direction began to feel inevitable. Sometimes the path surprises you. For Harry, one of the most rewarding parts of the job is sitting across the table from a first home buyer. He knows the process can feel overwhelming, and he's deliberate about making it feel anything but. "I try to provide as much information and reassurance as possible to make the process straightforward and stress free." What keeps it meaningful, he says, is the people themselves, the excitement and optimism that first home buyers bring with them is something that never gets old. "It's a privilege to be part of such an important milestone in their lives." Harry made the move from Wellington to Hawke's Bay to join the Willis Legal team, and by the sound of it, he's settled in well. If you're visiting him in the region, he'll take you to Sutto for the eggs benedict or Kami for sushi, then walk you around Windsor Park. It's a low-key itinerary that suits him; good food, fresh air, no fuss. The weekends follow a similar pattern. Good food, sport, time outdoors when the weather allows, and getting organised for the week ahead, plus the odd trip back to Wellington to visit friends and family. For someone who spends his working days helping clients prepare for the moments that matter most, a little structure away from the office clearly goes a long way. Harry is a solicitor at Willis Legal. If you're buying your first home, planning for the future, or simply want someone in your corner who'll make the process feel manageable, get in touch with us today.
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