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Do trustees have to explain their decisions?

Generally, trustees do not have to explain the reasons behind their decisions. However, as with most rules, there are exceptions:

  1. If trustees voluntarily disclose the reason behind a decision, those reasons can be presented and reviewed by the Court.

  2. If there is evidence that a trustee has (or may have) acted in bad faith or for an ulterior purpose. If beneficiaries have a plausible basis* for alleging a breach of duty by a trustee, the trustee can be ordered to disclose the reasons and documents that they used to make the decision.

*Ash v Singh [2019] NZHC 2790

For further information about the role and responsibilities of being a trustee please send us a message or contact us on 477 8080

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