Trust vs Will: Which Do You Actually Need in NZ?

What each tool actually does

What changed under the Trusts Act 2019

The Act took effect in January 2021 and made trusts significantly more demanding to run properly:

• Mandatory beneficiary disclosure. Trustees must provide certain basic information (the existence of the trust, the beneficiary's status, the right to request more) to every beneficiary, unless trustees actively decide otherwise and document the reasons. That decision must be reviewed regularly.
• Codified trustee duties. Five mandatory duties and ten default duties are now spelled out in legislation rather than scattered across case law.
• Record-keeping. Trustees are expected to keep written records of trust documents, financial statements, and the reasoning behind decisions.
• 125-year maximum duration (up from 80) — relevant for long-horizon trusts but irrelevant for most household trusts.

None of this is impossible to comply with. But it means a $200/year accounting bill and a 10-minute trustee meeting "to keep the trust going" is no longer enough. If a trust has been set up and quietly ignored for years, the disclosure obligations alone may now be embarrassing.

When a trust earns its keep

1. Providing for a vulnerable dependant

A disabled child or a relative who can't manage money is the strongest single reason to use a trust. Trustees can hold and apply assets over decades, control how funds are released, and protect from creditors or relationship-property claims against the beneficiary. A direct gift in a will doesn't give you any of that control.

2. Closely-held business or farm succession

Shares in a family company or interests in a farming operation often need to pass to one or two specific children rather than be divided equally — and the recipients usually need protection from a future relationship-property split. Trust structures (or shareholder-agreement plus will combinations) can hold the business steady across generations.

3. Blended families and foreseeable claims

Where a will leaves assets to a second spouse with a hope they'll later pass to first-marriage children, the structure rarely holds. A testamentary trust (created by the will) or a lifetime trust can give the second spouse a right to use assets without giving them outright ownership.

4. Assets that need to outlive you

Holiday homes intended to stay in the wider family, art or heirloom collections, or capital intended to support a charity over time — these often suit trust structures because no single individual is the obvious owner.

When a trust is probably not the right answer

What a well-drafted will already does

A modern NZ will, properly drafted, handles more than people assume:

• Testamentary trusts — the will can create a trust on death (e.g. holding assets for minor children until they're 25)
• Life interest provisions — a surviving spouse can use the family home for life, with remainder to specific children
• Specific bequests — heirloom items, charitable gifts, individual assets
• Guardian appointments for minor children
• Funeral and burial wishes
• Executor structure — joint executors, professional executors, backups

For most households, a will plus enduring powers of attorney plus up-to-date KiwiSaver and life-insurance nominations covers everything a trust would have been used for.

Real cost comparison over 20 years

Cost item	Will-only	Trust + will
Initial drafting	$500 – $900	$2,000 – $4,500
Annual trustee review and records	$0	$400 – $1,200/yr
Annual tax / accounting (if needed)	$0	$300 – $1,500/yr
Updates over 20 years (3 – 4 revisions)	$600 – $1,500	$1,500 – $4,000
Approximate 20-year total	$1,100 – $2,400	$17,500 – $62,500

Ranges drawn from public NZ firm fee schedules and trust accounting quotes. The trust column assumes proper Trusts Act 2019 compliance — not the cheaper "minimal touch" approach that worked before 2021.

How to decide

1. Name the specific problem a trust would solve. If you can't, you don't need one.
2. Get the cost in writing. Setup, year one, year five, and a realistic estimate over 20 years.
3. Ask about Trusts Act 2019 compliance specifically. If the lawyer waves it away, find another lawyer.
4. Stress-test the structure against likely future events — relationship breakdown, business sale, the death of trustees.
5. Don't be talked into it. Trust drafting is a profitable line of work; some firms are still defaulting to "yes" when the honest answer is "no, a will will do."