VA Trust Law
 
 
 
Vicki Ammundsen cast aside reference to authorship of several books in favour of reference to specialising in Trust Law (not to be confused with trusting lawyers) and confessed to having a small vineyard as a hobby.  No mentions of the fruits of labour being consumed so clearly one to be trusted.   
 
She  gave us all plenty to think about and consider how trustworthy some trustees are or have been and the quality of legal advice available to those seeking to set up and operate family and charitable trusts.  New Zealanders have apparently created more trusts than we have sheep and lead the world in the number of trusts per capita.  She used an interesting range of cases to highlight the pitfalls of poorly drafted trusts and various instances where they have been misused leaving the "trusting" out of pocket and or severely disadvantaged by unscrupulous  Trustees and legal advisers.

 
 
She drew attention to common threads that resulted in problems:
a) the well meaning who want to "help others" but have no clear plan or objectives now do they have a coherent well structured plan of action or strategy for implementation of their ideas/plans
b) trusts with assets but no money.  Frequently assets such as houses or property are gifted but with no money for maintenance or conversion for a particular use or money for operations and trustees with no idea as to how to raise money or run a charity they struggle and fail
c) Trusts with money but poorly defined aims, little or no strategy and variable policies on distribution and variable income.  Depending on the mix of skills within the  trustees these may succeed or fail  but with poorly drafted Deeds of Trust they may be hampered from the start quite independent of the skills and energy the trustees may bring to the table
d) Larger high profile trusts with publicly indefinable trustees - usually but not always these are well run and well controlled but not always
 
There is no government agency that has oversight of trusts so as Donald Trump should know there are 3 roads to ruin, Wine, Women and a Trustee - it is alleged he has encountered all three and come off 2nd best (does that make him a loser? - eds diversionary comment).  If a trust gets into difficulty you cannot generally appoint a liquidator however a court may appoint a receiver with the powers of a liquidator as has happened.  However once assets have been passed to a trust it is difficult to recover them.  Such is the case with the dubious knight Professor Sir Ralph Heberley Ngata Love.  Apparently approx. $1.5million received by the good knight diverted payment from a developer intended for a charitable trust, into a company he controlled and thence into a trust.  His son a senior lecturer in law at Victoria University, and his partner who is a lawyer, and have also been found guilty or naughty untrustworthy things clearly new a thing our to.  It  seems that as the money has passed to another trust that Sir Love was a trustee of but is no longer a trustee of that action against the trust by the defrauded trust is fraught.  The crown is seeking to size the money as the proceeds of crime however that action is also facing difficulty - a variation on the theme of "to Sir with Love" perhaps without the happy every after pommie teenagers or Sidney Poitier. 
 
In another delightful case of trussed up families a legal beagle son-in-law obtained the power of attorney from his ooh so trusting father-in-law to manage the trust ostensibly set up to hold in trust a house and home for his with.  The legal beagle trustee then obtained a loan on a property he claimed was not mortgaged when it was, then when in financial difficulties having flogged off the house to cover other debts left dear old dad in law to be chased by the bank for the mortgage.  Not to be outdone another perhaps less questioning lawyer than he might have been facilitated the sale of a church and the movement of the monies from the sale to Spain for the sole trustee to carry out charitable works there - possibly to assisting bulls.
 
It seems that although we like trusts we are a gullible lot (just ask the internet scammers) but frequent instances of criminal breach of trust, incompetent trustees and legal naughtiness have been noticed by government ministers who may perhaps have given more than a fleeting glance at their own Deeds of Trust and related documents and decided the Law Commission should take a look at New Zealand Trust Law.  It sounds like oxygen given to morons or something but nevertheless may reduce problems creaked by ignorance and malfeasance (naughty legal stuff) and allow those who need to sequester/protect/hide assets in trusts to continue to do so without loveless legal acts depriving them of their hard earned loot they wish to pass on to the next few generations of squanderers.  fine up and coming kiwis and the like.
 
Corporate Trust is seems are pretty secure and Blind Trusts provide an opportunity to demonstrate ignorance of conflicts of interest or inappropriate/non-pc investments.  Nevertheless we were warned to beware of reckless actions of Trustees and Directors of Corporate Trusts and that varying a trust that has no provision for such in its Deed of Trust requires pleading before a court.  If we are trustees we need to take an active interest and be aware of what the other trustees are like and are getting up to and if we don't we should retire or take the consequences.  Trustees have an obligation of fidelity and loyalty to beneficiaries and can be personally liable.
 
Be diligent in your due diligence, take care who you entrust with your trust, and don't rely on the Law Commission to counter all the naughty people with light fingers and the slippery legal and financial advisers attracted to trusts with significant assets, income and or cash.
 
We were however reminded by Ingrid who roundly thanked the speaker that the Rotary Trusts are well organised, well run entities managed by members of outstanding integrity and trustworthiness.
 
 
 
 
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