Trust administration: Not for the faint-hearted

What’s involved
When establishing a trust, trustees and advisers need to consider:

• The form of the trust deed and memorandum of wishes
• The process for transfer of assets to the trust, such as sales agreements, lease for life, assignment and transfers
• Providing investment advice and ongoing management, taking into account the strict requirements of the prudent person rule
• Taxation issues such as the need for IRD registration, tax returns, beneficiary returns and GST returns
• Meeting accounting requirements
• Holding trustee meetings, taking minutes, trustee resolutions, and maintaining an asset and liability register
• Completing an effective gifting programme with a deed of acknowledgement of debt, deed of forgiveness of debt, and annual IRD Gift Statements

Feedback suggests some advisers are outsourcing trust management just as they do taxation, specialist risk advice and funds management. While the legal profession can provide invaluable advice in the establishment stage, it’s to professional trustee companies such as Guardian Trust that advisers are increasingly turning. Guardian Trust for example has been in the business of trust design and administration for decades, and has built up invaluable specialist knowledge.

Choosing what to outsource
Advisers and trustees don’t have to take a "take it or leave it" approach any more. With the introduction of new flexibility such as Guardian Trust’s FlexiTrust service, advisers can "mix and match" the services they want to offer and which ones to outsource.

Guardian Trust, for example, offers three levels: