Trusts Act 2019

Trustees’ powers and indemnities - Trustees’ indemnities

85: Ranking of trust property

You could also call this:

"What order trust property is used to pay debts and expenses"

When you are dealing with trust property, the trust rules can say which property to use first to pay back the trustee or to pay expenses or debts. This is for the purposes of section 81(1), and it overrides what section 81(2) says. The trust rules can decide the order in which the property is used.

If you are the trustee, a creditor, or a beneficiary, you can ask the court to change the order of the trust property. The court can set aside the ranking of trust property if you make an application. You have the right to ask the court to make this change.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM7382994.


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Part 4Trustees’ powers and indemnities
Trustees’ indemnities

85Ranking of trust property

  1. For the purposes of section 81(1) (and despite section 81(2)), the terms of the trust may rank the order in which the trust property must be applied to reimburse the trustee or pay or discharge an expense or a liability.

  2. However, the court may set aside the ranking of trust property on the application of—

  3. the trustee; or
    1. a creditor; or
      1. a beneficiary.