Winding Up or Amending a Trust: What You Should Consider
13 April 2025

Trusts are a valuable tool in estate planning, asset protection, and financial management. However, circumstances may change, and you might need to amend or wind up a trust. Before taking any action, it's important to understand the considerations and implications involved. 

 

Understanding the Winding Up of a Trust:  Winding up a trust means ending it entirely, nullifying its existence, and distributing the assets to the beneficiaries of the trust. Here's what you should know: 

 

  1. Type of Trust: The ability to wind up a trust depends on the powers provided within its Trust Deed. Generally, revocable trusts can be changed or wound up by the Settlor (or other party nominated in the trust deed)  at any time, as long as they are mentally competent. Fixed trusts (or irrevocable trusts) cannot be easily wound up or amended without the consent of the beneficiaries and sometimes a court order. 
  2. Reasons for winding up: Common reasons for winding up a trust include changes in personal circumstances, such as marriage, divorce, or significant financial changes. If the trust no longer serves its intended purpose, winding it up may also be necessary. 
  3. Process: Winding up a trust typically involves drafting a formal revocation deed, which must be signed and notarised (this means a Notary Public, a type of lawyer, needs to sign). It is advisable to consult with a legal professional to ensure it is appropriate to wind up the trust and that all legal requirements are met. 

 

Considerations for Amending a Trust 

Amending a trust means making changes to the terms or provisions of a trust without completely winding the trust up. Here are some key considerations: 

 

  1. Identify the changes: Before amending a trust, clearly identify the specific changes you want to make. This could include altering beneficiaries, changing trustees, or modifying distribution terms. 
  2. Consultation with Trustees: Communicate with the trustees about the proposed amendments. Trustees play a crucial role in managing the trust and must be informed about any significant changes. Trustees must reach a unanimous decision together, before the Trust can be amended. 
  3. Legal compliance: Ensure that the amendments comply with all relevant legislation  and the terms and powers outlined in the original Trust Deed.  Consulting with a legal professional is highly recommended to avoid any undesired legal consequences. 
  4. Formal documentation: Like winding up a trust, amending a trust requires formal documentation. A Trust Amendment Deed must be drafted, signed, and notarised. In some cases, multiple amendments may be consolidated into a single restatement of the trust. 

 

Potential Implications 

Both winding up and amending a trust come with potential implications that need careful consideration: 

 

  1. Tax consequences: Changes to a trust can have tax implications, particularly for fixed trusts. It is essential to consult with a tax advisor to understand the potential impact on your tax situation. 
  2. Legal challenges: Improperly executed amendments or revocations can lead to legal challenges from beneficiaries or other interested parties. Ensuring that all legal requirements are met and that the changes are clearly documented can help mitigate these risks. 
  3. Asset protection: Amending or winding up a trust may impact the level of asset protection the trust provides. For example, winding up a trust could expose assets to creditors or legal claims. Consider the implications for your overall asset protection strategy before making any changes. 

 

Winding up or amending a trust is a significant decision that requires careful consideration and professional guidance. Understanding the type of trust, the reasons for change, and the potential implications is essential. Consulting with legal and tax professionals can help ensure that the process is carried out smoothly and that your trust continues to serve its intended purpose effectively. 

 

If you are considering winding up or amending a trust, take a thoughtful and informed approach. By doing so, you can ensure that your trust continues to provide the desired benefits and aligns with your current circumstances and goals. 

 

We have the expertise to guide you through this process. Contact us today to discuss your options and ensure your trust is serving your best interests. 

Join our Newsletter

Stay tuned

Contact Us

20 September 2026
He taonga to mokopuna, kia whāngaia, kia tipu, kia rea - a child is a treasure, to be nurtured, to grow, to flourish. A common thing we hear from clients is "I want custody of my children." While most people understand what "custody" means, the reality is that custody is no longer a legal term used in New Zealand family law. In fact, the term was removed from our legislation more than 20 years ago. So, what changed? The Care of Children Act 2004 replaced the old concepts of "custody" and "access" with language that focuses more directly on children's needs and parental responsibilities. Instead of talking about custody, the Family Court now talks about: Day-to-day care (who the child lives with and who looks after them on a daily basis); and Contact (the time a child spends with a parent or other important person when they are not in that person's care). The change was intentional. The law moved away from language that can sound like a child is something to be "owned" or "won" by one parent. What does "day-to-day care" mean? Day-to-day care refers to the practical care of a child, including: Where the child lives; Their daily routine; School attendance; Meals, bedtime, and general supervision; and The everyday decisions involved in raising them. A parent can have: Sole day-to-day care; or Shared day-to-day care arrangements. There is no legal presumption that one parent should have day-to-day care over the other. The Court's focus is always on what is in the child's welfare and best interests. What about "contact"? What many people previously called "access" is now referred to as contact . Contact can take many forms, including: Weekend visits; School holiday time; Telephone calls; Video calls; Supervised contact; or Other arrangements that allow a child to maintain a relationship with an important person. The Court recognises that children generally benefit from having ongoing relationships with both parents, provided doing so is safe and in their best interests. Does this mean I can't say "custody"? Not at all. Many people still use terms like "custody," "shared custody," and "access" in everyday conversation, and most lawyers will understand exactly what you mean. However, if you're involved in Family Court proceedings, you'll hear terms such as: Day-to-day care Contact Guardianship Parenting orders These are the legal concepts that will appear in Court documents and orders. Why does the language matter? The shift away from "custody" reflects a broader change in how New Zealand family law views parenting after separation. Rather than focusing on which parent "gets" the child, the law focuses on: The child's welfare and best interests; Maintaining important relationships; Encouraging parents to work together where possible; and Ensuring children are protected from harm. Ultimately, Family Court decisions are not about determining a "winner" and a "loser." They are about creating arrangements that best support the child's wellbeing. As family lawyers , we offer advice, guidance and representation in family law matters, if you would like assistance or to talk to someone, contact us today. Written by: Eva Leutele
A designed graphic with a photo of Casey Hucker, and her name on a black background with red and white text
14 September 2026
Meet Casey Hucker, Property Law Partner at Willis Legal, dedicated to guiding clients through property law. Contact us for expert legal assistance today!
Close-up of a man's hands typing on a laptop
8 September 2026
The age of AI is rapidly changing many aspects of our lives, however, AI has perils for lay people using it to draft legal documents or obtain legal advice.
Show More