Money Month Myth Busting - no, the Trust is not a Money Tree

12 Aug 2025

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Every day is a “money day”. Whether that’s earning it, spending it or dreaming about it, but hopefully not wondering where all of it went!

August is “Money Month” in New Zealand; a time to pause, get sorted, and (if you’re brave), finally open that email titled “trust distribution request” received from your beloved third cousin requesting access to money that they might think they have rights to.

If you're a trustee of a family trust, your inbox or family group chat might include something like:

“Hey, can the trust help me with a house deposit?”

“Mum said the trust was for our future. Can I get a loan for uni?”

“Dad, you’re a trustee, right? Can I get 10k to pay for a new car?”

We break down what managing beneficiary expectations might look like without turning Sunday dinner into the next binge worthy legal drama.

Myth Busting

Just because one might be a beneficiary of a trust, it doesn’t mean that the trust is a piggy bank waiting to be cracked open.

A trust is a legal structure (not a shopping-spree fund), where trustees must act in line with the trust deed, the Trusts Act 2019 and their fiduciary duties, among other laws.

This means careful decision making and good recordkeeping, not simply “Sure, sweetie”.

A Trustee’s Job: Process, Not Favouritism

Trustees cannot simply rubberstamp. Their role includes:

• Understanding the terms of the trust deed

• Acting in the best interests of all beneficiaries (not just the loudest one)

• Keeping proper records

So, when someone asks, “can I get something from the trust?”, the answer requires careful deliberation, following a good process, and making a wise decision.

Real Life Scenarios

“I need help with a house deposit.”

A common request. Trustees should ask:

• Does the trust deed allow for this?

• Has the trust supported other beneficiaries before? If so, how?

• Will there be fireworks if others find out?

• Are there any wider considerations? For example, any risk of trust funds being caught up in a relationship property claim?

Tip: If the trustees agree, proper documentation of the decision should be regarded as essential. No “handshake” arrangements. No “we’ll sort it out later.” No “let me do an instant bank transfer now”.

“Can the trust pay for uni?”

This could align with the trust’s purpose. However, trustees should still ask:

• Can the trust afford it?

• What conditions, if any, should apply (e.g. academic results)?

• What are the other considerations (e.g. what and where does the person want to study? Is it a request to study a “vanity” course in an exotic destination or is it something more likely to eventuate in a career?)

• What precedent will this set for other beneficiaries?

Another tip: Maybe check they’ve passed NCEA (or the new curriculum being phased in) first!

“I’m in debt. Can the trust bail me out?”

Urgent, emotional requests can tug at the heartstrings, but trustees should ask:

• Is the trust meant to assist with hardship?

• Will this open the floodgates?

• Would a one-off distribution or a loan repayable on certain terms be appropriate?

Remember: empathy matters but so does robust recordkeeping.

Money Month Takeaway: Trusts Aren’t Set-and-Forget

A trust needs constant upkeep, careful decision making, and legal fine-tuning.

With Money Month, we encourage you to:

• Revisit the trust deed and any memorandum of guidance

• Refresh your understanding of your legal duties as trustee

• Get ahead of tensions brewing in the background

Well-run trusts are powerful. Neglected ones? Potentially messy, expensive, and perhaps a script for the powers that be at Netflix.

Need a Resilience Check?

Just like reviewing your Will and/or Enduring Powers of Attorney reviewing your trust builds financial resilience.

And don’t forget contracting out agreements. Resilience also means ensuring separate property and relationship property stay as intended, especially when family trusts are involved (Spoiler: having a trust may not always protect your assets in the way you think it might!).

Need a hand?

Our Chambers High Net Worth-ranked Trusts and Asset Planning team can help navigate the nuances of life as a trustee. This includes a trust health check and assistance with fielding tricky requests. If you’re a beneficiary of a trust and want to better understand what that means for you, we can help with this as well.

Let Money Month be the nudge for you to let our Trust and Asset Planning Team help you pause and get sorted - before that next cousin’s email lands in your inbox.

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Trust and Asset Planning