Trusts Act 2019

Appointment and discharge of trustees - Removal of trustee

105: Optional removal of trustee

You could also call this:

"Removing a trustee when it's best for the trust and they're no longer suitable"

You can remove a trustee if it is good for the trust and one of the following reasons applies. The trustee must have done something wrong, like repeatedly refusing to act as trustee, or they are no longer suitable for the role. This can happen if they become bankrupt or their company has financial problems.

You might think a trustee is no longer suitable if they have been convicted of a crime involving dishonesty. It could also be if you cannot find or contact the trustee, or if they are not allowed to manage a company under the Companies Act 1993. Other reasons include if they are not allowed to manage a company under the Financial Markets Conduct Act 2013 or the Takeovers Act 1993.

Someone with the power to remove trustees can act to remove them if it is desirable for the trust. This person must consider if the trustee is still suitable for the role. They will look at the trustee's conduct and circumstances to make this decision.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS76754.


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104: Compulsory removal of trustee, or

"Removing a trustee who can't do their job anymore"


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106: Notice of decision to remove, or

"Telling a trustee you've decided to remove them"

Part 5Appointment and discharge of trustees
Removal of trustee

105Optional removal of trustee

  1. A person with the power to remove trustees may act to remove a trustee if—

  2. it is desirable for the proper execution of the trust; and
    1. 1 or more of the following grounds for removal are met:
      1. the trustee repeatedly refuses or fails to act as trustee:
        1. the trustee becomes an undischarged bankrupt:
          1. the trustee is a corporate trustee that is subject to an insolvency event:
            1. the trustee is no longer suitable to hold office as trustee because of the trustee’s conduct or circumstances.
            2. For the purposes of subsection (1)(b)(iv), examples of conduct and circumstances that may make a trustee no longer suitable to hold office as trustee include the following:

            3. the trustee is convicted of an offence involving dishonesty:
              1. it is not known where the trustee is and the trustee cannot be contacted:
                1. the trustee is prohibited from being a director or promoter of, or being concerned or taking part in the management of, a company under the Companies Act 1993:
                  1. the trustee is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Financial Markets Conduct Act 2013 or the Takeovers Act 1993.