What does a will trustee do in New Zealand?

Written by Henry Smith · Reviewed by Smiths Insurance & KiwiSaver, licensed Financial Advice Provider (FSP712931) · Updated 2026-10-20 · Reviewed annually, or sooner if the rules it describes change.

A will trustee is the person or trustee company a will names to hold and manage property for other people under a trust that the will creates, often until a child reaches an age the will sets. In New Zealand the trustee is bound by the Trusts Act 2019, which sets five mandatory duties no will can remove and a longer list of default duties that a will can change (Trusts Act 2019, ss 22 to 38).

This is general information, not legal advice. For a trust with unusual terms, a dispute, or a decision you are unsure about, ask a lawyer or a trustee company.

Where the executor's job ends and the trustee's begins

An executor winds up the estate: gathers the property, pays debts and tax, and carries out the will. A trustee exists only if the will holds property back, for example "to my children, held until each turns 25". Then the executor hands the held property to the trustee, and the trustee manages it for the beneficiaries. Community Law says the roles of executor and trustee are often combined in one person (Community Law: What is a trustee). Our executor vs trustee guide sets the two roles side by side.

One point is easy to get wrong. The trustee is not the only person held to trust law. Since 30 January 2021 the Administration Act says the duties of an administrator are "taken to be express trusts" for the Trusts Act, which applies to them with necessary changes (Administration Act 1969, s 4B). The Act defines administration to include probate, so an executor who has a grant is within that wording. The executor's short-term duties are therefore also governed by the Trusts Act. What changes at the handover is the length of the job and what the will says about it.

The five duties a will cannot remove

The Trusts Act calls these mandatory. A trustee must perform them, and the terms of the trust cannot modify or exclude them (s 22).

The default duties a will can change

Sections 29 to 38 set further duties that apply unless the trust's terms modify or exclude them within the limits of the Act (s 28). In practice most wills leave them in place.

• Care and skill (s 29): the care that is reasonable in the circumstances. A professional trustee is measured against what is reasonable to expect of a professional.
• Invest prudently (s 30): the care a prudent person of business would take managing the affairs of others.
• Consider using powers (s 32): think "actively and regularly" about whether to exercise powers.
• No self-benefit, no profit (ss 31 and 36): never use a power for the trustee's own benefit or make a profit from the trusteeship.
• Avoid conflicts (s 34) and act impartially (s 35): impartial does not mean equal shares, but no beneficiary may be treated unfairly.
• No reward (s 37): a trustee must not take a reward, though expenses and disbursements are reimbursed.
• Act unanimously (s 38): if there is more than one trustee, they decide together.

A trust cannot excuse a trustee from liability for dishonesty, wilful misconduct or gross negligence (s 40), and any clause that tries is invalid to that extent (s 42).

What the work looks like: an example

This example is illustrative, not a real estate. Suppose a will leaves the remainder of an estate, say $300,000, on trust for two children until each is 25, and names an aunt as trustee.

1. Take over and read the terms (ss 23 and 24). The aunt receives the property from the executor and works from the will's trust clauses.
2. Keep records (s 45). A trustee must keep, so far as is reasonable, the terms of the trust, records of the trust property, decisions, contracts, accounts and any letter of wishes.
3. Invest prudently (s 30), and review regularly (s 32).
4. Decide on payments for the children's welfare. While a beneficiary is a child, the trustee may use income to meet the child's welfare, and may pay or apply capital for welfare after considering all the relevant circumstances (ss 62 to 64). Conditions can be attached to such payments (s 65). For the Act, the age of majority is 18 (s 20), but a will can set a later age for receiving the property, as this one does.
5. Tell the beneficiaries (s 51). There is a presumption that basic trust information goes to every beneficiary: that they are one, the trustee's contact details, any change of trustee, and their right to ask for the terms.
6. Pay tax. Inland Revenue lists undistributed trust income as taxed at 33% up to $10,000 a year and 39% above that, from 1 April 2024. Its page does not say which rate suits a testamentary trust, so ask an accountant (Inland Revenue: Trustee tax rates).
7. End the trust. When the trust ends, all the property must be distributed as the terms direct (s 19). Here the will says that is when each child reaches 25.

Can a trustee also be a beneficiary?

Often, yes. The Act's rule on this is narrow: a sole trustee must not be the sole beneficiary (s 14). The other duties still bite. A trustee who is also a beneficiary must still avoid conflicts (s 34), act impartially (s 35) and not use a power for their own benefit (s 31). If the same person is trustee for the children and a beneficiary alongside them, take advice on how to handle decisions where their own share is affected.

Can a trustee be personally liable?

Yes. Four points matter most.

• A trustee is personally liable for an expense or liability incurred when acting as trustee, but one who acted reasonably is entitled to be reimbursed from the trust property (s 81).
• A beneficiary can ask the court to review a trustee's act or decision on the ground that it was not reasonably open to the trustee (s 126).
• The court may relieve a trustee of liability for a breach if the trustee acted honestly and reasonably and ought fairly to be excused (s 131).
• A trustee who gave notice to potential creditors and claimants, with a deadline at least 30 days later, and had no notice of a claim is not liable for distributing without regard to unknown claims. That does not cover Family Protection Act or Testamentary Promises Act claims (s 79).

Gross negligence is judged on how unreasonable the conduct was, taking into account the trustee's skills and whether they were paid (s 44). For the estate stage, the Administration Act (s 47) protects an administrator who distributes properly more than six months after the grant, but only if no application or written notice of one has arrived. That is separate from the 12-month window to claim under the Family Protection Act (Administration Act 1969, ss 47 and 48; Family Protection Act 1955, s 9). See contesting a will.

What can beneficiaries ask for?

Beneficiaries can ask for information, not only wait for it. The presumption is that a trustee gives a beneficiary the trust information requested within a reasonable time (s 52). It is a presumption, not an absolute right. The trustee must weigh factors such as the beneficiary's interest, confidentiality, the settlor's intentions and the effect of disclosure (s 53), and may refuse. Reasons for the trustees' decisions are not part of "trust information" (s 49). If no beneficiary gets any information, the trustee generally has to apply to the court for directions (s 54).

Family member or trustee company?

A family trustee may charge nothing. Under the Trusts Act a trustee must not take a reward unless the terms of the trust change that default duty (s 37). On executors, Community Law says they can be paid only if the will provides for it, and it does not recommend naming a spouse, partner or children as executor because they may not be impartial (Community Law: Choosing an executor). A trustee company charges. Public Trust says its estate administration fees are "based on the work we do, not the value of the estate", with fixed fees for standard work and hourly rates for additional work (Public Trust: Estate administration). For some services its fees are capped at 5% of the estate's total asset value plus the income it receives, and special fees such as probate grants, property, business and legal work sit outside the cap, as of 6 July 2026 (Public Trust: Pricing). Under the Administration Act a "trustee corporation" means Public Trust, the Māori Trustee or any trustee company. See Public Trust and wills for what it offers.

Who can act? Anyone may be appointed unless disqualified: a child, an undischarged bankrupt (unless the court consents), a person who lacks the capacity for the role, or a body corporate subject to an insolvency event (s 96).

Removing or replacing a trustee

The will can name who may remove and appoint trustees. If it does not, the remaining trustees have that power (s 92). Removal is compulsory if a trustee loses capacity (s 104). It is optional where it is desirable for the trust's proper execution and a ground is met, such as repeated refusal or failure to act, bankruptcy, or no longer being suitable because of conduct or circumstances (s 105). A trustee who wants to retire must say so in writing and be discharged under s 101.

Life insurance and funeral cover payouts

A life insurance payout is estate property only if it is payable to the estate. Who is paid otherwise depends on policy ownership and the insurer's terms (Community Law). Money that goes to the estate is an asset the executor handles first. Funeral expenses rank ahead of most other claims if the estate cannot pay everyone in full, but behind the costs of administration (Administration Act, s 31, and Insolvency Act 2006, s 393). So funeral cover that pays the estate may be used up by the funeral before any trust is funded. Our life insurance payout guide explains the owner and beneficiary choices.

Momentum Life and this page

Nothing on this page depends on insurance. The buttons open Momentum Life's online quote, one option among many for someone planning their own cover. Funeral Insurance from Momentum Life Limited takes New Zealanders aged 40 to 75 and pays a fixed benefit of $3,000 to $30,000 towards costs; total premiums can end up larger than the benefit, and it may not cover the whole funeral. For the first 24 months it pays only for accidental death within 90 days of the accident, and the premiums for that person are refunded for any other death. Quick Life takes ages 18 to 65 with no health questions, but pre-existing conditions and suicide are excluded for the first 2 years. Neither product accepts new applicants over 75. Momentum Life Limited's A.M. Best rating is B (Fair), in the agency's "Vulnerable" range (financial strength page). Setting money aside is the alternative.

QuoteHub is a Momentum Life partner and Smiths Insurance & KiwiSaver may receive a commission if you buy a Momentum policy; see how we are paid. Advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). Back to the estate planning guides.

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Cite this page QuoteHub NZ (2026). Will Trustee Duties NZ: Role and Responsibilities. www.quotehub.co.nz/guides/estate/trustee-of-a-will-nz. Updated 2026-10-20.

References

• Trusts Act 2019, New Zealand Legislation
• Administration Act 1969, New Zealand Legislation
• Family Protection Act 1955, New Zealand Legislation
• Community Law: Choosing an executor
• Community Law: Dealing with the deceased's property
• Inland Revenue: Trustee tax rates
• Public Trust: Pricing
• Public Trust: Estate administration
• Community Law: What is a trustee
• Momentum Life: Financial strength

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