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

Marta Black
4 February 2026
We’re pleased to shine a light on Marta Black, an Associate in our Dispute Resolution team. Since joining Willis Legal in 2022, Marta has become a valued member of our Dispute Resolution team. She is known for her calm, thoughtful approach, and her ability to bring clarity to even the most complex disputes. Marta works across a wide range of civil litigation, with a particular focus on contentious trust matters and complex relationship property disputes. These areas often involve significant assets and sensitive family dynamics, and Marta is recognised for the steady guidance she brings to her clients throughout the process. Marta appears regularly in the range of courts in the civil jurisdiction. Before entering practice, she worked as a Judge’s Clerk at the High Court. That experience gave her a strong foundation in legal analysis and a close understanding of how complex decisions are made, something that continues to shape her work today.  When asked what motivates her, Marta says she is driven by the challenge of providing accurate, timely, and practical advice. She enjoys the intellectual side of litigation and the satisfaction of solving difficult problems. “ I enjoy a complex puzzle and looking at a problem from all angles to find a solution that delivers results for our clients ,” she says. That mindset has seen her navigate some memorable matters, including acting in a contentious company dispute involving prejudice to shareholders, which ultimately led to a formal proof hearing in related relationship property proceedings. Another standout was a six‑week breach of contract trial in Auckland. It was hard‑fought, strategically demanding, and ultimately successful. Outside work, Marta enjoys the best of Hawke’s Bay life. She loves spending time with her young family and their two beagles, heading to the beach, and embracing her new hobby of camping (or glamping, as she admits with a smile). When asked what she finds most rewarding about her role, her answer is simple: “ Interesting work, with good people .”
28 January 2026
Why it’s worth reviewing your will, trust and Enduring Powers of Attorney
21 January 2026
A new year often brings fresh plans and new possibilities. For many people, that includes thinking about a change in where, or how, they live. Whether you are planning to buy your first home, move somewhere new, or sell a property in 2026, good preparation starts well before an agreement is signed. Property transactions often take longer than people expect. There are documents to review, decisions to make, and steps that need to happen in the right order. Starting early gives you more control, more confidence, and fewer surprises along the way. It is all about setting yourself up for a smoother journey. If you are thinking about selling A successful sale begins with understanding your property’s paperwork. Taking time now to check a few key areas can save you stress later. Title details: Easements, covenants, and other restrictions can affect how a buyer views your property. Knowing what is on your title helps you prepare for questions before they arise. LIM and property file information: Councils hold a lot of information about your property. Ordering these documents early gives you a clear picture of what a buyer will see. Building work and consents: If you have made alterations, it is important to confirm that the right consents and code compliance certificates are in place. Missing paperwork is one of the most common causes of delays or last-minute renegotiations. Identifying any issues early means you can deal with them on your terms, without pressure once an offer arrives. If you are thinking about buying Buyers benefit just as much from early preparation. A little groundwork now can make you a stronger, more confident purchaser when the right property appears. Understand the agreement: Sale and purchase agreements are legally binding. Knowing the key terms, conditions, and timelines ahead of time helps you move quickly without feeling rushed. Get finance ready: Talking to your mortgage broker or lender early means you will understand what conditions may apply and how much flexibility you have. Plan your due diligence: From building reports to title checks, due diligence is easier when you are not racing the clock. Early advice helps you know what to look for and what questions to ask. The biggest advantage is getting legal advice before you sign, not after. It is about being informed and prepared. Why timing matters When people leave things too late, they often end up making decisions under pressure. Important details get missed. Red flags in contracts or property information go unnoticed. And what should be an exciting life moment becomes unnecessarily stressful for you and your whānau. How early legal advice helps Starting the conversation early means you can: Understand risks and obligations before you commit. Get clarity on timelines, conditions, and key milestones. Move forward smoothly once you are ready to buy or sell. It is all about giving yourself the best chance of a straightforward, stress-free experience. Thinking about a move this year? Let’s talk You do not need to be ready to transact to get in touch. A short conversation now can save time, cost, and uncertainty later. If a property move is on your radar for 2026, our team is here to offer clear advice and practical guidance every step of the way.
Show More