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Trusts Act 2019

Trustees’ powers and indemnities - Powers of trustee - Powers to apply trust property for beneficiary’s welfare

64: Trustee’s power to pay or apply capital for beneficiary’s welfare

You could also call this:

"Trustees can use trust money to help beneficiaries if it's needed for their wellbeing."

Illustration for Trusts Act 2019

If you are a beneficiary of a trust, the trustee can use some or all of your share of the trust's capital to help you. The trustee can do this if they think it is necessary for your welfare. They must consider all the relevant circumstances when making this decision.

When the trustee is deciding whether to use your capital, they must not do it if it would affect someone else's interest in the trust. However, if the person who might be affected is an adult and agrees in writing, the trustee can use your capital. The trustee can also ask the court for permission to use your capital.

If the trustee does use your capital to help you, they must keep track of it as part of your share of the trust. You can find more information about this by looking at the Trusts Act 2019 and similar laws, such as s 41 of 1956 No 61.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM7382959.

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Part 4Trustees’ powers and indemnities
Powers of trustee: Powers to apply trust property for beneficiary’s welfare

64Trustee’s power to pay or apply capital for beneficiary’s welfare

  1. A trustee may pay or apply some or all of a beneficiary’s interest in the capital money or other capital assets of the trust property for the beneficiary’s welfare, if this section applies to the beneficiary.

  2. This section applies in respect of a beneficiary with an interest (whether vested or contingent) in some or all of the capital of the trust property.

  3. In deciding whether to pay or apply capital and the amount to pay or apply, the trustee must consider all of the relevant circumstances.

  4. In exercising the power under this section, a trustee must not pay or apply capital for a beneficiary’s welfare if—

  5. the beneficiary’s interest is subject to a double or multiple contingency:
    1. the payment or application would prejudice a person entitled to a prior life or other interest (whether vested or contingent) in the amount paid or applied, unless—
      1. the person whose interest may be prejudiced is an adult and consents in writing to the payment or application; or
        1. the court, on the trustee’s application, orders the amount to be paid or applied.

        2. An amount paid or applied under this section must be accounted for as part of the share in the trust property to which the person is or becomes absolutely or indefeasibly entitled.

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