New Zealand trust law is the result of centuries of development by Acts of Parliament and by the courts both here and, in earlier times, in England. We cannot cover all the detailed rules here. If you need further explanation about some aspects or you have any questions, you should talk to your lawyer. A trust is a legal arrangement under which a person (the trustee) holds money, property or other assets for the benefit of a specified person or people (the beneficiary or beneficiaries). Usually, the original owner of the assets (the settlor) will transfer the assets to the trustee after they have both signed a deed to record the terms of the trust. Of course, a trust may have two or more settlors, several trustees and a number of beneficiaries. It’s possible, and quite common,for one person to be a settlor, as well as being one of the trustees and one of the beneficiaries.
At the heart of a family trust is the relationship between trustees and beneficiaries. There are other types of trust, for example charitable trusts are established not for the benefit of individual people but for charities or charitable purposes.
The other essential element is trust property or assets: a trust arises whenever a trustee holds an asset on trust but without an asset there is no trust.