• Login:
Welcome, Register Here
follow PropertyTalk on facebook follow PropertyTalk on twitter Newsletter follow PropertyTalk on LinkedIn follow PropertyTalk on facebook
Page 1 of 4 1 2 3 ... LastLast
Results 1 to 10 of 32
  1. #1
    Join Date
    May 2005
    Posts
    1,070

    Default Rights of Beneficiaries

    GF-regarding Trusts. Its very rare for a Beneficiary of a Trust to have any say. Usually they only become a Beneficiary with rights only after an event has triggered the Trust-like death. Trusts are controlled by the Settlors but administered by Trustees. That woman must have had the other Trustees (if any) go along.
    To give you two examples. I am a beneficiary of my parenst Trust. Until they die, I can say or do nothing with the Trust.
    On one of my Trusts I have the Auckland Zoo as a Beneficiary. I assure you Larry the Lion has no rights to my assets until I die!!!

  2. #2
    Join Date
    Apr 2008
    Posts
    2,086

    Default

    As I recall, the beneficiaries have the "equitable interest" in the trust property, while the trustee has the "legal interest" (although I can't recall ever receiving any logical explanation as to what that actually meant).

    The trustee is definitely liable to the beneficiaries for bad/wrong/negligent investment decisions. Although Captain Crab and the Auckland Zoo have no ability to direct the trustee, they retain the ability to claim compensation from the trustee for investment decisions made by the trustee.

    In this case, an action against the trustee would be futile. The "little old lady" is definitely liable. She transferred her property to a trust, and then treated it as her own, when she was taken for a ride by a Blue Chip shyster. The point is that she should have realised that the property was not hers to deal with. She was a mere trustee of it. Yet she went ahead and mortgaged the trust property to the hilt, and it will now be sold via a mortgagee sale. The little old lady is definitely liable to the beneficiaries for the loss she has caused them.

    Problem is: the little old lady can't pay a cent.

  3. #3
    Join Date
    May 2005
    Posts
    1,070

    Default

    GF "The trustee is definitely liable to the beneficiaries for bad/wrong/negligent investment decisions"

    No, They are not liable while my parents/me are still alive and are the Settlors.
    This only applies once the Trust is put into play, ie after my parents die. And then the Trustee(s) are only bound by the terms of the trust. Until then I have no right.You're not drawing the distinction as to WHEN one becomes a beneficiary who can recieve benefit and being NAMED as a beneficiary.Also beneficiaries can be removed changed at any time before the Trust is triggered.
    Also the little old lady, if she was the Settlor DOES control the Trust and she can decide what the Trust and Trustees do. She can sack the Trustees if she likes.
    You're not a lawyer are you.

  4. #4
    Join Date
    Apr 2008
    Posts
    2,086

    Default

    The lurking lawyers out there will correct me if I'm wrong, Capt. Crab, but I reckon that you are talking about your parents' wills. If they have decided to leave their property to X and the Auckland Zoo, then that has no legal effect, because they ain't dead yet, and because they can change their will whenever they please.

    But if they have already transferred their assets to a trust, the situation is completely different. The beneficiaries have a current proprietory interest in the trust property - enforceable through the courts.

  5. #5
    Join Date
    May 2005
    Posts
    1,070

    Default

    "But if they have already transferred their assets to a trust, the situation is completely differentThe beneficiaries have a current proprietory interest in the trust property - enforceable through the courts."

    No they dont.Not while the Settlors are alive. I know how Trusts work, god knows I've set enough of them up.

    Instead of arguing your vague opinions why dont you do some research and provide a link to prove your view? I have some nice big textbooks on Trusts you could use if you like? Otherwise I am going to have to start charging you for all this free legal advice I'm giving you (again)
    cheers
    CC
    Back on topic now eh

  6. #6
    Join Date
    Jun 2005
    Location
    Auckland
    Posts
    5,086

    Default

    Created a new thread, because it's off-topic for the BC thread, but still interesting.

    I thought that the Trustee's were holding things in trust for the benefit of the beneficiaries, and if they could be shown (by the beneficiaries) that they were not doing so (e.g. running the Trust to fill their own pockets), then the beneficiaries had some legal comeback on the Trustees?

    I know that the Settlors can (usually) replace Trustees, but that assumes that they care and can agree what cause of action to take.

    As a made up example

    A divorced couple have set up a trust for their children, and have all 4 Grandparents as the Trustees. The couple can no longer talk to each other, let alone agree on something.

    The Grandparents sell some of the assets of the trust and go on a Golfing holiday to Queensland with the proceeds.

    Do the beneficiaries (the children of the divorced couple) have any control over the irresponsible actions of the Trustees?

    cube
    DFTBA

  7. #7
    Join Date
    Apr 2008
    Posts
    2,086

    Default

    Cpt. Crab: All of my big textbooks tell me that the beneficaries have a proprietory interest in the trust property from the time of settlement of the trust. The settlors have no say. They are merely the persons who have transferred the property. After that, it is a matter for the trustee/s and the beneficiaries.

  8. #8
    Join Date
    Apr 2008
    Posts
    2,086

    Default

    cube: The only reason why the settlors can usually replace the trustees is that this power is expressly set out in the trust deed. Were it not for that, the settlors would have no such power.

    In your example, the beneficiaries definitely have a claim against the negligent/bent trustees.

    It's identical to your super fund manager having a free holiday using your money.

  9. #9
    Join Date
    Apr 2008
    Posts
    2,086

    Default

    The reason for this disgreement is trusts created via a will. Those trusts don't come into existence until the testator dies - because a will has no effect until the death of the testator and until it has been proven to be the testator's last valid will.

    For example, assume that you are an only child and that you anticipate that your widowed mother will leave everything to you, via a trust created for your benefit. This does not mean that you have any proprietory interest in your mother's property while she is alive. She can squander her money in whatever fashion she pleases, and there isn't anything that you can do about it. But if she dies, and her property is transferred to a trustee to be held for your benefit, there is plenty that you can do about it.

  10. #10
    Join Date
    Feb 2004
    Location
    Wellington
    Posts
    2,776

    Default One Fish....

    Two Fish
    Red Fish
    Blue Fish ???? no Green Fish ....but wait the two fishes are both green

    Though I think he's right and here is a link.

    http://www.fmlaw.co.nz/publications/...ies_rights.htm


    Can a beneficiary sue a trustee?
    A beneficiary can sue a trustee for breach of duty. The trustee is liable to account for profits or to pay damages. There is no time limit where the claim is based on fraud or fraudulent breach of trust, or for monies or property held by the trustee. In all other cases there is a time limit of 6 years.

    Seems pretty clear to me .... a beneficiary can hold a trustee liable

    Cheers
    Spaceman
    Delightfully in need of some Tender Loving Care
    Blessed are those who can give without remembering and take without forgetting
    Some things are not as they seem, nor are they otherwise


 

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. Rights of owners
    By freeloader in forum Property Management
    Replies: 5
    Last Post: 17-02-2014, 05:57 PM
  2. Sickness beneficiaries and WINZ payments
    By NESW in forum Tenant Stuff (NZ)
    Replies: 14
    Last Post: 22-11-2010, 02:46 PM
  3. HELP!!! What are my rights here?
    By celty69 in forum Tenant Stuff (NZ)
    Replies: 6
    Last Post: 27-08-2009, 09:11 PM
  4. Property Rights Take a Hit
    By jenny_pt in forum Regions News (USA)
    Replies: 0
    Last Post: 15-06-2009, 11:40 AM
  5. Do I Have any Rights?
    By Wasabi in forum Commercial Property (NZ)
    Replies: 10
    Last Post: 22-04-2009, 11:57 AM
  6. Management Rights
    By rose1957 in forum Property Investment (NZ)
    Replies: 0
    Last Post: 09-01-2009, 05:03 PM
  7. Beneficiaries of the Family / Trading / Rental Trusts.
    By Bluekiwi in forum Finance, legal and tax (NZ)
    Replies: 3
    Last Post: 12-09-2008, 06:05 PM
  8. Can a trusts beneficiaries be changed?
    By psubr in forum Finance, legal and tax (NZ)
    Replies: 3
    Last Post: 13-07-2008, 11:39 AM
  9. Inclusion of Property Rights in Bill of Rights Act Supported
    By Walter in forum Finance, legal and tax (NZ)
    Replies: 0
    Last Post: 19-10-2006, 10:54 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •