The Good, the Bad and the Ugly of Trusts and Legal Structures by Chris Spargo

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Published on 04/08/2016
On 22 June, I spoke at the Bay of Plenty Young Fruit Growers competition at Mills Reef Winery. This was our first year sponsoring this event and I enjoyed our involvement of supporting another rural industry that is important to our economy and New Zealand.

The presentation focused on the risks and appropriateness of using family trusts within business structures, particular operating trading trusts. The momentum of case law against trusts and trustees is moving at an alarming speed. The current environment has become even more complex since I completed the Kellogg Rural Leadership Programme in 2011, where I focused on the implications of the New Zealand legal system on estate and succession planning.

The use of trusts in legal structures is important. However, it is how they are utilised that is becoming increasingly important. In my view this is another risk for business, which includes risks associated with health and safety, resource management, employment, climate conditions and in the kiwifruit industry Psa, to name a few.

Unfortunately rural families continue to set legal precedence through our legal system. We all need to work harder to ensure that this does not continue to happen. This is especially relevant for succession planning, where legal structures can have an impact on the rights of family members under the Property (Relationships) Act and the Family Protection Act. The wrong ownership structures, such as trusts owning land can also fail to promote the staged process required to implement a succession plan.

The feedback from the seminar was great, and to an extent a concern, where there are a large number of trading trusts within the kiwifruit industry owning land.


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