Do I need a trust in NZ?

If you’ve heard that trusts are “dead” in New Zealand, you’re not alone. Between tighter laws, tax changes, and media soundbites, many families are wondering: Do I really need a trust anymore?

The answer? It depends. Trusts aren’t dead, but the way we use them has changed. And for many people, it’s time to take a closer look.

Why some say trusts are ‘dead’

Recent legal and tax reforms have reshaped the trust landscape:

• The Trusts Act 2019 introduced mandatory trustee duties, record-keeping, and greater transparency for beneficiaries.
• The 39% trust tax rate now exceeds the personal income tax rate for many Kiwis, eroding the tax advantages that once made trusts appealing.
• Increased scrutiny by courts means more challenges to poorly structured or purpose-less trusts, especially from ex-partners and disgruntled beneficiaries.

In short: if your trust was set up without a clear purpose, it may no longer be fit for purpose.

Here’s the truth: trusts aren’t dead

At Grayson Clements, we believe the question isn’t “Do I need a trust?”
It’s “Does a trust still serve your values, goals, and risks?”

When used thoughtfully, trusts remain an important tool for:

• Protecting assets from business risk, relationship claims, or creditor exposure
• Providing for vulnerable beneficiaries or blended family dynamics
• Passing down wealth in a structured, values-driven way
• Enabling philanthropic legacies and charitable giving

A trust isn’t a product. It’s a structure to protect what matters. But only if it’s aligned with your reality and properly maintained.

What’s changed, and what you need to know

• Compliance costs have gone up. If your trust lacks purpose or isn’t actively used, it may not be worth the admin.
• Trust deeds need regular reviews. Many haven’t been updated since the early 2000s. That’s a red flag, especially if your beneficiaries include ex-partners.
• Winding up a trust too early can expose you. If you’ve spent years building up a protected asset base, dissolving the trust could put your home or your children’s inheritance at risk.
• Being a trustee carries real legal responsibilities. If you’re still listed as a trustee (and don’t realise it), you could be personally liable.

Who should still consider a trust?

• Business owners or professionals with commercial risk  
• Families with significant assets or complex structures
• People in blended families or with vulnerable dependents
• Those wanting to protect intergenerational wealth
• Anyone looking to leave a legacy, whether to family or charity

If that’s you, the answer isn’t to panic and wind up your trust. The answer is to review it, make sure it still serves your purpose and is structured properly under the new legal framework.

Don’t throw the baby out with the bathwater

We’ve had clients come in saying, “My colleague said trusts are outdated and that I should just wind it up.”
But after reviewing their trust considering their goals, assets, and risks, it was clear the trust was still the right fit, just in need of a tune-up.

You wouldn’t tear down your house because it needs a paint job. A trust is the same, it might just need a refresh, not a demolition.

So… do you still need a trust?

It depends. But don’t base your decision on headlines or hearsay.
Base it on your values, your risks, and your long-term goals.

At Grayson Clements, we specialise in making complex structures simple. We start with your why – not just your balance sheet. Then we tailor your legal structures to support that.

Whether your trust needs reviewing, refreshing, or replacing, we’ll help you figure it out.

Need to review your trust? Or wondering if you need one at all?
Get in touch with our Private Wealth team.