Plain language law

New Zealand law explained for everyone

Trusts Act 2019

Express trusts

16: Maximum duration of trust

You could also call this:

"A trust can last for a maximum of 125 years, unless it's a special kind of trust."

Illustration for Trusts Act 2019

The maximum duration of a trust is 125 years. You can think of a trust like a container that holds money or property for someone. The terms of a trust can say how long it will last, and it can be less than 125 years.

If the trust does not say how long it will last, it will automatically last for 125 years from when it was created. There are some trusts that can last forever, like a charitable trust or some superannuation schemes, such as those that section DC 7 of the Income Tax Act 2007 applies to, or trusts that are exempt under section YA 1 of the Income Tax Act 2007.

Some trusts can also last forever if another law says they can, or if they are allowed to under common law or equity. The rule against perpetuities, which is a common law rule, no longer applies.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM7382883.

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15: Creation of express trust, or

"How to set up a trust where someone puts assets aside for a specific purpose or person"

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17: Application of maximum duration rule to resettlements, or

"Time limit for trust property to be distributed when it's moved to a new trust"

Part 2Express trusts

16Maximum duration of trust

  1. The maximum duration of a trust is 125 years.

  2. The terms of a trust may specify or imply a shorter duration.

  3. If the terms of a trust do not specify or imply a duration or a mechanism for or means of determining the date on which the trust property will be finally distributed, the trust continues until the date that is 125 years after the creation of the trust.

  4. If the terms of a trust specify or imply a mechanism for or means of determining the date on which the trust property will be finally distributed, the trust continues until the earlier of—

  5. the date determined by that mechanism or means; and
    1. the date that is 125 years after the creation of the trust.

      1. The common law rule known as the rule against perpetuities is abolished.

      2. Despite anything in this section, the following trusts may continue indefinitely:

      3. a charitable trust:
        1. the trusts of a superannuation scheme to which section DC 7 of the Income Tax Act 2007 applies:
          1. the trusts of an exempt ESS (within the meaning of section YA 1 of the Income Tax Act 2007):
            1. a trust that is created by or under, or is subject to, another enactment that allows the trust to continue indefinitely:
              1. a trust that may continue indefinitely under common law or equity.

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