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Trusts Act 2019

Trustees’ duties and information obligations - Exemption and indemnity clauses

41: Restriction on trustee indemnity clauses

You could also call this:

"Trustees can't use trust property to fix mistakes made on purpose or by being very careless"

Illustration for Trusts Act 2019

If you are a trustee, the rules of the trust cannot protect you from losing trust property if you act dishonestly, do something wrong on purpose, or are very careless. This means you can be held responsible for your actions if you breach the trust in one of these ways. You will not be able to use the trust's property to pay for any mistakes you make because of your dishonesty, wilful misconduct, or gross negligence.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM7382920.

Topics:
Money and consumer rights > Banking and loans
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40: Restriction on trustee exemption clauses, or

"Trustees can't use trust rules to avoid blame for very bad or careless mistakes"

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42: Invalidity of exemption clause or indemnity clause, or

"When trust rules are broken, some clauses are not allowed"

Part 3Trustees’ duties and information obligations
Exemption and indemnity clauses

41Restriction on trustee indemnity clauses

  1. The terms of a trust must not give a trustee any indemnity against the trust property for liability for any breach of trust arising from the trustee’s dishonesty, wilful misconduct, or gross negligence.