Trust Series 2021 – Trust Validity and Sham Trusts

Description

The Trusts Act 2019 has introduced a definition of Express Trust but no corollary definition of Sham Trust. As stated in the Preferred Approach paper that presaged the Trusts Act 2019:

We have looked at the options of a statutory restriction on the purposes for which trusts can be used, a general look-through provisions setting out factors that indicate when dispositions to a trust may be set aside for a particular purpose, and a statutory provision defining or indicating when a trust is a sham. After careful consideration we have decided not to pursue these options. It would be impossible to limit trust purposes in a way that maintains the flexibility of the trust and only targets the purposes that should not be lawful.

To put this into a practical construct, the relevant enquiry can be that a trust is not a sham but that nevertheless the anticipated protection is not available. As noted in the Privy Council decision in Webb v Webb at [87]:

There is, however, no inconsistency between the finding by Potter J, upheld by the Court of Appeal, that the trusts are not shams and a conclusion that Mr Webb’s attempts to create the trusts have failed or are defeasible. Acceptance that Mr Webb intended to create trusts does not in any way preclude a finding that he reserved such broad powers to himself as settlor and beneficiary that he failed to make an effective disposition of the relevant property. Moreover, and as I have explained, the powers of clause 10 are conferred on Mr Webb as settlor, not in his capacity as Trustee or Consultant. These powers were therefore amply sufficient for Mr Webb to arrange matters in such a way that he alone would hold the trust property on trust for himself and no-one else, with the consequence that the legal and beneficial interest in all of that property would vest in him.

This webinar will address the current law in New Zealand and internationally with respect to the creation of a trust, trust validity, sham Trusts and the indicia of trust failure together with contemporary considerations with respect to control and economic reality.

HIGHLIGHTS
This webinar, which will conclude with a question and answer section, will provide an opportunity for practitioners to up-date their knowledge regarding sham trusts, resulting trusts and indicia of trust failure.

Topics covered will include:

  • The law relating to sham trusts
  • The Trusts Act 2019, s 15 (Creation of an Express Trust)
  • The correlation between intention and sham
  • Sham and trust failure in other jurisdictions
  • True Effects of Trusts / Illusory trusts
  • Economic realities / economic substance
  • The extent to which a lack of commercial reality can impact on trust validity

WHY ATTEND
More trust cases are being heard by our courts than ever before and new ways to attack trusts are regularly being considered by the courts and in practice. The impact of developments with relation to sham and resulting trusts and the true effects or economic realities of trust settlements warrants fresh consideration.

LEARNING OUTCOMES

Attendees will learn:

  • The requirements of a valid trust
  • The importance of appropriate trust governance
  • Sham or trustee negligence – what is the difference?
  • How to manage control
  • Tools to assess economic trust realities and related considerations

SUITED TO

This webinar is targeted at all practitioners at all levels but will be of particular interest to more experienced practitioners.

PRESENTER

Vicki Ammundsen, Director, Vicki Ammundsen Trust Law Limited

 

1.25 CPD Hours

  • Nov 03
    Wed, 10:30 AM NZDT - 11:45 AM NZDT Online
    • $195.00 excl. GST

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One-connection-one-fee

Our webinars operate on a 'one-connection-one-fee' basis so you can have your whole team participate for one cost effective price and claim CPD points.

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All registrants to a live webinar will automatically be sent a recording at the end of that week along with a full transcript of the webinar, regardless of whether you attended or not.

Sole practitioners

A discount on webinars is available for sole practitioners. Please contact us at NZ‑learning@wolterskluwer.com to confirm eligibility.