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Trusts Act 2019

Trustees’ powers and indemnities - Trustees’ indemnities

83: Power of court to approve indemnification

You could also call this:

"Courts can help protect trustees from financial loss if they make a mistake with trust property."

Illustration for Trusts Act 2019

The court can approve a trustee being protected from losing money if they made a mistake with the trust's property. You might be one of the people who benefits from the trust, and the court can make this decision for you if you are not able to make decisions for yourself. The court can also make this decision for people who will benefit from the trust in the future.

When the court is thinking about making this decision, they have to consider how it will affect you and others who have an interest in the trust's property. They think about whether you will benefit or be harmed by the decision, and what the person who set up the trust wanted to happen.

If the court makes this decision, it is final and you do not need to do anything else, it just happens. The court can be asked to make this decision by the trustees or by someone who benefits from the trust, like you.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS47105.

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Money and consumer rights > Banking and loans
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82: Indemnification of trustee with agreement of beneficiaries where indemnity impaired, or

"Trustees can be protected from paying for mistakes if beneficiaries agree and conditions are met."

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84: Power of court to waive requirement of consent to indemnification, or

"Court can decide to let trustees use trust money without your agreement"

Part 4Trustees’ powers and indemnities
Trustees’ indemnities

83Power of court to approve indemnification

  1. The court may, on behalf of any of the beneficiaries described in subsection (2) who has an interest in the property of a trust, approve the indemnification of a trustee for a breach of trust under section 82.

  2. The beneficiaries are—

  3. a beneficiary who lacks capacity:
    1. a person who may acquire a beneficial interest at a future date or on the happening of a future event or on becoming a member of a certain class of persons:
      1. a future person who may acquire a beneficial interest.

        1. An application for an order of approval may be made by—

        2. the trustees or any one of them:
          1. any person with a beneficial interest in the trust property.

            1. On an application for an order of approval, the court must take into account each of the following factors:

            2. the nature of any person’s interest in the trust property and the effect of the proposed order on that interest:
              1. the benefit or detriment that may result to any person with an interest in the trust property if the court makes or refuses to make the proposed order:
                1. the intentions of the settlor of the trust in settling the trust, if it is practicable to ascertain those intentions.

                  1. An order of approval binds the person on whose behalf it is made and takes effect without any further step.