Why do we hold land in Trusts


manaaki whenua, manaaki whaanau

For a long time Trusts have been a common legal entity in New Zealand, and is one of the most formidable asset-protection tools available. Trusts have been in existence for almost a millennium in various forms. From the early 13th century Trusts became commonplace in England where land was conveyed to people (today called Trustees), who held the land for the benefit of others (today called Beneficiaries). One of the main reasons for forming a Trust was to avoid paying taxes and duties. The popularity of Trusts in medieval times was largely brought about by the land laws of the day; parents could not pass land to their children when they died. When a person died while holding feudal land, their adult heirs had to pay the feudal lord a sum of money to "re-purchase" the land and then pay subsequent profits from the use of the land. However, these payments could be avoided if the land was conveyed to a third party (a Trustee) so that future generations of the original "owner" could use the land even though they never held title to it. By the late 15th century, most of England was held in Trust. During the 18th and 19th centuries, Trusts began to be used for commercial purposes as well as for holding land.

In New Zealand, Trusts have become increasingly popular during the past 50 years, firstly amongst farmers protecting their land holdings, then amongst other business people who wished to separate their personal assets from their business risks. A Trust is a legal tool that reduces the chances of a person losing what assets they already have, and those they accumulate in the future. Assets are placed in a Trust by a Settlor and they are managed under the control of Trustee(s) who must deal with the assets for the benefit of other people called Beneficiaries. An individual person may be the Settlor, a Trustee and a Beneficiary of a Trust. Given the colonial experience of Māori, virtually all land was “processed” by the Native Land Court, thus, changing it from its traditional tenure (also known as “Native title or Customary title)” into general freehold. The impact of this, and other factors, led to the gross loss of Māori land and resources. Efforts made in the later part of the last century, saw the Courts trying to protect the last bastions of multiple-owned Māori land from further disenfranchisement.

Today, Trusts are primarily used to help manage land holdings for the benefit of its shareholders, or beneficial owners. With special protection from the Māori Land Court under the Te Ture Whenua Māori Act 1993, Trusts strive to serve as a legal mechanism to aid the socio-economic aspirations of an often diverse group of beneficiaries. For more information about Trusts, contact your local Māori Land Court Regional Office.