The legislative landscape that trusts now operate in has made it vital to consider whether you really want to be a trustee and to ensure you get trust administration and management right if you do.

For accountants, this means questioning the sensibility of holding a trustee role in a client’s trust, ensuring legislative compliance where the role is held and recognising when to refer clients to trust experts.

The introduction of the Trusts Act 2019, which became operational 30 January 2021, and amendments to the Income Tax Act and Tax Administration Act in New Zealand, have made the law more transparent on one hand. On the other, beneficiaries have been provided with clear enforceable enshrined rights, making it simpler to hold trustees to account. That has made many accountants question whether they still want to be an independent trustee as they address the risk-reward equation.

These legal changes have increased trust administration and management, and along with it, the work required of trustees. This frequently results in time-consuming, low billable work being undertaken by accountants who act as independent trustees as their co-trustees look to them to ensure compliance with the legislation.

Recognised leader in the trust industry and managing director of New Zealand Family Trust Services (NZFTS), Janet Xuccoa warns the legislation relating to trusts has ‘real teeth’, significantly heightening risk and broadening trustee liability.

“As a result, many accountants and lawyers have decided to stop offering these services. If an issue arises and trustees are found liable, their own assets are at risk,” she says.

With a background in law and accounting, Xuccoa has spent almost four decades working with trusts. She has written several books and been recognised for her expertise, being the recipient director of the inaugural award for Corporate Trustee of New Zealand.

She was appointed managing director of NZFTS in 2024, a company which assists clients with their trust affairs, and acts as an independent trustee for many New Zealand trusts.

“Professional trust administration and management has become time-consuming and complex,” she says.

“Historically, many accountants and lawyers provided trustee services as an adjunct service without dedicated processes in place. This approach is no longer viable.”

Xuccoa says that trust administration requires processes to track work, manage files and ensure compliance, which takes time. As such, it’s best undertaken by dedicated trust administrators working holistically with a client’s accountant and lawyer. This provides two benefits. Firstly, the relationship between accountant and client is ringfenced and protected. Secondly, a checks and balance system is created, ensuring accounting and legal matters are considered when trustees act.

“Accountants can reduce their risk further by retiring as independent trustees,” says Xuccoa.

“This leaves them to concentrate exclusively on their core role of being an accountant, helping their clients manage their financial affairs efficiently and effectively, rather than being burdened by the complex and risky fiduciary duties trusteeship carries, which consumes time that accountants often struggle to charge appropriately for,” she adds.

To get in touch with New Zealand Family Trust Services

Call: +64 21 45 1966 (international) or 021 45 1966 (within New Zealand)

Email: [email protected]

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