Marcroft JennyJENNY MARCROFT (NZ First): Thank you Mr Assistant Speaker. This Trusts Bill before the House is a relatively technical type of bill but a very important one that's taken eight long years to get here today—a technical bill that has a wide-ranging effect for everyday ordinary New Zealanders. The current trust laws are simply antique. They're old and outdated. It's been 60 years since the trust laws came into effect and now all these years later—and several generations as well—this law is very much in need of modification to bring it in line with our modern evolving society. I would like to acknowledge the former Minister of Justice for her work in bringing this reform to the House.In fact we can trace the history of trusts back to England to about the 13th century but in New Zealand trusts grew to popularity in the 1950s. Perhaps this was due to the high rates of death duty and the introduction of wealth transfer taxes.Trusts are not just for the corporates. Trusts are for the protection of everyday ordinary New Zealanders and these antique laws need to be changed so that ordinary Kiwis can understand and access information about the law. In trust law private express trusts are probably the most common form of trust. They're a traditional means of providing financial security for families. Trusts play a significant role in people's lives and in the economy. There are estimates of between 300000 and 500000 trusts in the country. Now because of the sheer volume of the number of trusts this law change will have an impact and the potential to affect a wide cross-section of society and the country's economy.The bill aims to provide clear simple and accessible trust law. The bill follows the recommendations of the Law Commission in 2013 and proposed reforms for modernising and clarifying the trust law. It was a strongly held view of the commissioners that this was something that perhaps ought to have been done a while ago and now was the time to do it. It replaces the Trustee Act 1956 and the Perpetuities Act 1964. The Trustee Act 1956 is outdated and no longer reflects current trust practice. Many of the provisions are difficult to understand and need to be read alongside a considerable body of case law. The bill will help to ensure trusts are administered properly. Existing trusts should be able to benefit from the provisions. There is an 18-month transition period from the date of commencement for existing trusts to allow those involved in trusts to review and consider the application of the bill to their trust if they so wish.What are some of the issues with the current Act? Well aside from the fact that it's a bit of an antique piece of law currently there is little reference to trustee duties in the Trustee Act 1956 and various administrative powers are scattered throughout the Act. The language of law is at times difficult to understand for ordinary folk. Part 3 of the bill outlines trustee duties in simple and easy-to-understand language. Trustees in general are your everyday people and the bill sets out the rules in a clear manner so that the trustees can understand their roles and what is required of them. It will also help the beneficiaries understand what their rights are too. It's important that trustees and people who are dealing with trustees have a good understanding of their legal position. This bill brings clarity to this.Ordinary people have trusts not just wealthy folk. They set up a trust so that in the case of some unfortunate event—say maybe a parent dies and then at some point in the future that surviving spouse remarries—the property inheritance of the children does not get swept away and lost in the reconfigured new family. If a parent wants their own children to inherit their wealth their property then the protection of a trust will keep the assets secure for the beneficiaries way into the future.Trusts are used in New Zealand for many purposes not just the one I've just outlined. A trust offers a way to separate the legal ownership of assets from those who are to benefit from it. Using a trust is also one of the ways to allow property to be held collectively rather than individually. Aside from a common family trust trusts are used in a wide range of industries. This includes farming research and charitable sectors as well as for listed companies. There are unit trusts trusts for superannuation schemes energy trusts and Māori land trusts.So how can these trusts be used? Well they're used to provide for family members with special needs—for example if a family member has a disability. They could be used to protect personal assets from business risk; to keep a farm within a family for successive generations; to hold collectively Māori land and other assets; to protect assets from relationship property claims; and in the capital markets both in structured financial transactions and for investment purposes. But sometimes things go wrong—and they do on an incredibly regular basis—and they can go wrong in the most spectacular of ways. This can see a rift in families a division that cripples and sees the loss of large amounts of money and sometimes property too.This bill will carve a pathway for alternative dispute resolution either arbitration or mediation and if it is appropriate the bill will enable people to sort out and resolve their disputes outside of the courts. So while the bill aims to provide clear simple and accessible trust law it also covers other categories of trusts at the discretion of the court where it's necessary and appropriate. It clarifies various administrative powers of trustees including managing trust property investment decisions and delegation of powers. This bill also defines the processes for the appointment and discharge of trustees. The bill will introduce a range of changes and new functions which include: it will define for its purposes what an express trust means; trustees must keep relevant documentation for duration of the trusteeship—the maximum duration of an express trust is 125 years—guidance for the distribution of property under the expiration of the express trust; and promotion of the alternative dispute resolution process to resolve those trust disputes.There is some good news too. A reduction in costs will be one of the benefits of this bill over the medium to long term. Simpler and clearer law will reduce the need for trust users to seek legal advice. Having had the pleasure of engaging a lawyer from time to time I certainly know that this is not a very cheap exercise. There will also be savings from no longer needing to take some of the issues to court—for example transferring a property title when a trustee is no longer mentally capable. For those who have had to do this they will know that they could've been stung anywhere to the tune of $5000 to $10000. So on the upside there will be savings in judges' and registrars' time along with savings in court costs.So in conclusion the Trusts Bill aims to provide clear simple and accessible trust law. It'll be easier to understand and it updates and modernises a legal antique relic. New Zealand First will be supporting this bill. Kia ora koutou.