Myth Busting

Being Transparent


Getting Answers


At TrustUs we believe in honesty and transparency. So we have created this page to help dispel myths and have an open discussion. If you have a hard hitting question we have not covered below, please do email and we will endeavor to answer it and update this page accordingly.  

Quality vs Price


How Expert is your Expert?

From a Referrer

Statement: Your solution isn't that cheap - I know a lawyer that did everything for the same price and less!


Response: We are not trying to be “cheap” as price-wars typically are a race to the bottom. 


We are looking to provide quality at an affordable price that removes a lot of the hassle out of the process. Not just upfront, but on an ongoing basis.

  • Our experience is that many existing Trusts are not compliant – even when an expert has been involved - and that’s where quality comes in. For this reason, TrustUs went straight to the top of legal expertise by securing input from Chris Kelly.
  • Chris has spent over 30 years specialised in wills, trusts and estates. Chris started his career at Public Trust. For eight years Chris was General Counsel at the New Zealand Guardian Trust Company.
  • Chris is co-author of two leading legal texts: Garrow and Kelly Law of Trust and Trustees (6th edition) and Dobbie's Probate Administration Practice (5th edition).
  • He has presented more than a dozen papers at legal conferences and has chaired LexixNexis Elder Law Conferences. In the 1970's Chris attended Victoria University graduating with a Bachelor of Laws and later completing study for a Diploma of Management from the New Zealand Institute of Management. Chris completed a Master of Laws with a thesis on Trustee Accountability in 2009.
  • He is a member of the New Zealand Law Society, the Property Law Section and the UK based Society of Trust and Estate Practitioners (STEP).
  • We also undertook to get 2nd and 3rd Legal Opinions along with quality assurance of the processes, systems and documentation we have built.

Complex Will


Treating Family Members Differently

From a Referrer

Question: I had a Lawyer say that the Will they prepared for me can not be challenged. Is this true?


Answer: The short answer is no. Although the will is likely to have been drafted very well, the question of the Will being challenged sits around the family situation, around the time of death and any potential testamentary promises that may have been made. Which none of us can predict.  


Do you want to increase the likelihood of your will being challenged?

  • For a long time the remaining estate of individuals (i.e. after rest home costs over the last few years of life) dwindled ones estate down to $15,000. So there was little point in challenging the will, as the costs would have been greater than the potential outcome. 
  • With rule changes lifting minimum thresholds and family home values increasing so much over the last few decades many are now making the decision to go to court and challenge the Will.
  • For example a $100,000 property didn't seem worth it, but now that house prices sit closer to $1,000,000 the motivation of potential beneficiaries is much higher. 
  • As you can imagine as our wealth grows as a nation so too will the number of Wills being challenged in our courts. 
  • If you have drafted a complex Will that likely favors one child over another, be warned. A family member will likely challenge your Will, no matter the pain and heartache that follows. 
  • This is one of the reasons why a Family Trust becomes so useful with protecting inter-generational wealth. Assets held in trust do not form part of the estate.

Independent Trustee


Cost vs Benefit

From a Referrer

Question: Do you always need an independent or professional trustee?


Answer: No. It comes down to timing and a personal decision balancing your benefits, likely expertise and costs against the likely risks you are to face over the medium and longer term. 


Practical Considerations and Right Timing

  • For most the decision comes down to the level of disposable income you have available to be able to cover the ongoing costs of an experienced professional trustee, balanced against the level of wealth you are looking to protect. What's the net positive gain to you and your family each year?   
  • Do you need a Rolls Royce solution where a VW Golf is more suitable and functional?
  • The key is right sizing. You can always add a professional trustee with the Family Home Trust at a later date if needs become more complex. Or you can simply pay for the appropriate expertise as a Trustee when it is warranted (i.e. an investment adviser or a property expert or a smart accountant or a specialist lawyer). There's no need to routinely over-spend when smart-spending at the right time makes sense.
  • If you are considering having an independent trustee, ask about the yearly ongoing costs involved and what those costs would cover. Many range from $750 to $1,500+GST per annum, even for minutes that confirm no changes have taken place. Perhaps also ask about hidden costs to change or remove Trustees. If you have real estate held on trust, you are likely to be charged $1,200 to $1,800+GST plus face mortgage redocumentation and LINZ costs. Such costs can be justifiable where there's genuine complexity - and perhaps if the timing of adding/removing a Trustee occurs when buying/selling or remortgaging - but ask a few more questions and consider carefully if it's just the family home and perhaps your life insurance held on trust. Will you be getting value for money?

Annual Gifting


A Gifting Programme vs An Outright Gift

From a Referrer

Question: I have a $500,000 home and was told I had to complete a gifting programme at $13,500 a year? By my calculations that would take me 38 years to complete. I thought gift duty had been abolished in New Zealand? Is there are better way?


Answer: There is a better way. We suspect the $13,500 a year is a hangover from historical gifting programme approaches looking to ensure you obtain rest home subsidies. 


Asset Protection Now vs Government Support Later

  • The problem being most family homes (and their net equity) are worth more than the minimum requirements to gain rest home subsidies, even today. So completing a gifting programme at $13,500 a year isn't actually going to achieve much for you.
  • Please do refer to our comments below on Rest Home Subsidies and the powers of the CEO of the Ministry of Social Development (i.e. even if you do complete the above the CEO can override the decision to provide you with Government Support).
  • At TrustUs we believe it is more important to gain asset protection as early as possible, hence our suggestions as an Outright Gift (i.e. you can have the equity and capital gains in your family home protected within 5 years rather than taking 38 years) at the cost of not obtaining rest home subsidies you were not likely to get anyway.

Inland Revenue


Existing Creditors

From a Customer

Question: If I set up a family trust now, will this protect me from the large tax bill I have to pay the IRD?


Answer: The short answer is no. Technically from the moment you start earning income and paying taxes the IRD is seen as an existing creditor.


In very simple terms, don't ever mess with the tax man

  • Pay your taxes on time. You are not going to win.
  • The IRD has the benefit of hindsight, and
  • The power to impose large penalties for late payment.

Rest Home Subsidies


I am gifting $13,500 a year

From a Referrer

Question: I am currently completing a gifting programme at $13,500 a year. To one day be able to obtain rest home subsidies. Why does TrustUs call out that the family home trust will fail if the intention is to get rest home subsidies?  


Answer: We would suggest taking a good look at Section 147A of the Social Security Act 1964.


The Powers of the Chief Executive of the Ministry of Social Development 

  • Section 147A of the Social Security Act 1964 (in part) states that: "If the Chief Executive of the [Ministry of Social Development] is satisfied that a person who has applied for a means assessment, or the spouse or partner of that person, has directly or indirectly deprived himself or herself of any income or property… the Chief Executive may, in his or her discretion, conduct the means assessment as if the deprivation had not occurred."
  • In other words, gaining rest home subsidies should not be a key reason to set up a family trust, given the discretionary powers of the Chief Executive, and likely fail.
  • The purpose of the Family Home Trust service is to protect your family from your day to day financial risks during your lifetime, rather than trying to gain government funding over the last few years of your life.

Mortgage Lending


Personal Guarantee over Real Property

From a Customer

Question:  If I stop paying my mortgage, the property is protected in my trust isn't it? 


Answer: No. If the property is held on trust (or not) and you have not completely paid off your mortgage, the bank will have first priority over the property to be able to sell your family home to recover the debt owed to them. 


Your Trust retains the net equity (if any) from the proceeds of the sale

  • Liability within your trust can be limited to slightly more than the loan/mortgage. Ask your lender about adding this in when you next refinance.
  • When you transfer the title you need to gain permission by your bank to do this. Your bank will want the trustees of your trust to then provide a Guarantee over the property now held on trust.
  • When you transfer the family home to a trust what you are in effect doing is protecting the net equity you hold in the property by ensuring this equity is not held in your personal capacity.

House Insurance


When you have a Leaky Home

From a Referrer

Question: Why can't you put a leaky home in a Trust? A leaky home won't make a difference?


Answer: TrustUs does not want to offer a solution that will fail our customers, if they have this situation.


Usually there is an insurance claim underway

  • Setting up a Family Home Trust at this point would be like applying for new cover when you've just crashed your car (or you've just been diagnosed with a nasty health issue). You do not want to create an opportunity to be declined. It is just too high a risk of non-disclosure of a pre-existing condition.

Health & Safety


Person Controlling a Business or Undertaking

From a Referrer

Question: How is a Director responsible for Health and Safety of a Tradie, isn't ACC gonna cover that?


Answer: It isn’t about ACC payments for the injured person and it isn't only Directors at risk. 


It is about the fines and criminal offences of those controlling a business or undertaking that didn’t do all they could to keep their workers safe.

  • You do not want to be forced into selling the family home to pay off fines
  • With recent changes in Health and Safety Laws in New Zealand the net for personal liability risks has been cast much wider.
  • How exposed are we? The way we work changes almost daily. Can any of us predict what the next 30 years is going to look like? As we become more experienced, are the chances of being responsible for keeping someone safe at work going to increase too?
  • Do you think you might go into business for yourself, be self-employed or contract out your services?
  • We are only suggesting that it makes good sense to take practical steps to protect your family assets from the financial risks you face day to day.

Mortgagee Sale


When you can no longer meet mortgage payments

From a Referrer

Question: What happens with a Mortgagee Sale?


Answer: The process is the same as a normal sale.


The Family Trust is only ever protecting the net equity held in the property

  • The only difference between a normal sale and a mortgagee sale (whether or not a Trust is involved) is that there is a higher chance of the property selling below market value (often referred to as a rapid-fire sale) and therefore less equity being obtained.
  • The net benefit may end up neutral, which means a mortgagee seller could be in a similar situation to a new home-owner (i.e. not owning much now). This situation does not mean the Trust is invalid; it is about accumulated wealth over a longer period of time in a secure protected way. 

Business Failure


Deed of Nomination vs Transfer of Title

From a Referrer

Question: If a customers business goes under, how will the Deed of Nomination stack up in terms of Conveyancing and the Transfer of Title?


Answer: This question needs to be broken down into two parts.


Part 1 - When is the family home protected under a Trust?

  • Some believe that the family home is not fully protected until the transfer of title has occurred. This isn’t true or correct. You do not obtain full protection under a trust until some years after the completion of the gifting programme. 
  • This is because there is still a debt owed to you in your personal capacity until the debt has been fully extinguished. The transfer of title is to show a transactional record; it doesn’t mean the property is now safe and secure.
  • The question around a business going under actually relates more to the length of time the trust has been in existence and for how long the gifting programme has been completed, i.e. a strong forward-planner would not hold assets in their personal capacity and would have completed/extinguished the debts at least five years prior to any issues arising.
  • The five years relates to a number of potential scenarios. For example, if the person were to die within a 5-year period, any gifting undertaken over $6,000 p.a. can technically be clawed back into the estate (fall back into personal ownership). There are also similar policies when looking at gifting five years prior to retirement.
  • The key point is that there is greater protection within a Trust if gifting has been fully extinguished at least five years prior to big life events or problems occurring.

Part 2 - What is a Deed of Nomination? 

  • A Deed of Nomination for Real Property is technically a conveyance under the Lawyers and Conveyancers Act. This is why a Lawyer or Conveyancer has to prepare the document. If anyone else does it, they are breaking the law.
  • The difference is that customers now have a choice to decide when the timing is right to Transfer the Title of the Property. Which will most likely be at a time where the cost is minimised (i.e. when next refinancing, or buying and selling) as they will be paying for conveyancing and the transfer of title anyway.

Providing Referrals


What is my risk as a Referrer?

From a Referrer

Statement: My customer goes off and grabs a PROMO CODE and sets up a Family Home Trust. The s*** hits the fan, then they are going to go me as an Adviser!


Response: We understand the nervousness about referrals, especially if advisers aren't fully aware of the differences in the continuum of advice. 


The continuum of advice: Full, Limited, Class or No Advice (aka Transactional Services)

  • Being very clear about the service provided is essential; whether you are an AFA, RFA or a QFE adviser. In all instances, it is mandatory for an adviser to be clear about areas they can and cannot provide advice in and advisers will typically have aligned themselves to partners who can provide a certain service or have an area of specialisation outside of their own expertise.
  • Most advisers are simply referring a customer to TrustUs as a service or product the same way that they're referring a customer to other providers, e.g. "If you're looking at Trusts or Wills you can go through your lawyer or a specialist; or you may like to check out the TrustUs option. This takes you through some simple steps and, if an online solution isn't suitable, it'll put you onto a specialist". It's up to the customer to decide whether an online option is fit for purpose, with a few online questions so they can consider the key factors in setting up a Trust.
  • The PROMO CODE simply gives the customer a discount on the retail price and, depending on the referral relationship between the adviser and TrustUs. The adviser may receive a referral fee (recognising that the adviser's having a referral conversation about a 'gap' for the customer).
  • The PROMO CODE does not assume that the referrer has given advice. What is essential is that referring advisers don't stray into advice by saying "you should take this online Family Home Trust option" or "this eTrust option will be the best option for you", unless they're an expert and following the appropriate advice process. This fits with many other referral processes across financial services and other sectors.
  • There are inbuilt 'belts and braces' within our online option which arguably makes it more robust (with consistent online record-keeping) than some other Trust set-up options as it encourages the customer to confirm their situation, their motives and whether there are pre-existing conditions that would make a Trust less likely to provide the Family Home security a customer is looking for.
  • A customer could only "go you" if you have operated illegally (i.e. outside of the Financial Advisers Act, Consumer Guarantees Act, Fair Trading Act and the Secret Commissions Act).



Receiving a Referral Fee

From a Referrer

Question: Do I need to disclose that I might receive a referral fee?


Answer: Yes, in addition to the disclosure requirements under the Financial Advisers Act (with changes pending under the Financial Services Legislation Amendment Bill), the Secret Commissions Act 1919 under Section 8 requires that if a referral of a customer is made to a third party, and for which action a referral fee or other consideration is received as a reward, that must be disclosed to the customer. Failure to disclose any such fee is an offence under the Act.


Any relevant remuneration relating to referral relationships can be stated in your Disclosure Statement 

Referral relationships and mutual recognition or remuneration aren't new - especially when customers are keen for us to refer them to other parties outside of our area of expertise. Typically phrasing such as the following is being used by our Referrers:

  1. We have referral arrangements with some key partners, including XXXXX and XXXXX, and a fixed fee may be paid to me/my organisation depending on the business completed.
  2. This fee recognises that we’re holding the conversation and referring you to a possible solution or expert.
  3. Referral partnerships can save customers time and hassle, and can sometimes offer advantages beyond a direct retail relationship.
  4. This fixed fee may range from XXXXX to XXXXX depending on what business is put in place.

Professional Indemnity Insurance


Industry Standards

From a Referrer

Statement: What protections do you have in place for customers?


Response: In line with Industry Standards TrustUs holds Professional Indemnity and Public Liability cover through DUAL New Zealand Limited (on behalf of the underwriters at Lloyds). 


This provides protection for our customers

  • For negligence, misrepresentation and inaccurate information on our behalf.