Preserving Whanau Legacies: Integrating Maoritanga into Family Trusts in NZ

14 August, 2023 | Peter Smith

Family trusts have been a significant part of New Zealand’s culture for over 30 years. Many families who own property have a family trust which is used to protect the wealth of a family represented in its property assets, for several generations of a family.

A Family Trust is established by the Settlor (the person starting the Trust) and the Trustees signing a document called a Trust Deed.

The Trusts Act 2019 allows many Trust Deeds to be amended so that the term of the Trust is a maximum of 125 years.

Many Maori families have been encouraged to establish family trusts particularly to look after and protect the family home or family property – loosely translated as Kainga Whanau.

Family Trust – a development of English law

Family Trusts are a development of English law going back hundreds of years when wealthy knights of the realm, who owned significant property, would leave England for the Continent and the Middle East to do battle, and would leave their property assets in the hands of a group of people called trustees, to look after when they were absent overseas. The documents evidencing these transactions were called settlements. Many of the knights would die while they were absent overseas and the deeds of settlement were often the subject of court cases, as to their meaning and effect.

Specialised courts called the courts of equity arose who were empowered to determine the meaning of deeds of settlement and over the many years since these courts were established, the courts of equity have continued to be recognised as the courts that determine all disputes over Trusts. In New Zealand the High Court is designated as the court of equity.

No law of Trusts in Maoritanga

There is no similar law of trusts as part of Maoritanga. In fact it could be argued that there is no concept of property ownership, and accordingly trust ownership in traditional Maoritanga. Rather Maori lore requires kaitiaki or stewardship of the land . This is a different view of property particularly when Maori families view their family homes as almost amounting to taonga.

New Zealand is a property-owning democracy

New Zealand is a property-owning democracy where all property-owning residents know how to buy and sell property and know the value of their property. The wealth of New Zealand citizens is often judged by the amount of property, or the value of the property, that they own.

Given that property is effectively a tradeable commodity in New Zealand, this runs directly contrary to the concept of stewardship of land or kaitiaki.

Risks and challenges for Maori involved in Family Trusts

It does not take much thinking about, to express the view that despite a Maori family home being held in a family trust, an influential person within a family could agitate for the sale of the family home and the distribution of the proceeds among the whanau, notwithstanding that it was the intention of the settlors that the home remained in trust for all members of the family for as long as possible. Further the same people, who would agitate for the sale of the property and the distribution of the proceeds of sale among the whanau, would also require the family home to be treated as an investment so that those members of the family occupying the family home would be required to pay market rent for the property which rent would be used to pay rates, insurance and maintain the property and even provide a surplus for distribution among the whanau.

Further, under English law, people who live in a property for which they have some form of beneficial ownership (for example a Trust) after a while, begin to think that they own the property and have rights to say who can live in it and who can visit it. Such attitudes are directly contrary to the principles of Maoritanga which invite all whanau to be able to return to their kainga. In other words concepts of Maoritanga when they clash with concepts of English law are going to provide fuel for discontent and dispute among family members who are beneficiaries of a family trust.

Accordingly, it is our view that those who want the principles of Maoritanga enshrined in their deeds of family trust are going to have to take great care in developing a set of rules that cover the following matters:

• Developing a set of rules around how trustees are sourced and appointed – it is important that the groups of trustees through every generation of a whanau, share a similar set of values and attitudes towards the protection and operation of the family home.
• Developing rules around how rates, insurance, maintenance and up keep of the property are going to be met with the understanding that the people contributing koha towards rates, insurance, maintenance and up keep do not think that they are making an investment in the property and have any ownership rights as a result.
• Developing the rules around occupation of the family home. Who can live permanently in the family home and what are the rules around its occupation.
• Developing trustee policies restricting distributions. Is there going to be a policy for instance that the family home is not be sold and further there is no right to any income from the property at all as all income/koha will be used for rates, insurance, maintenance and up keep with any surplus put away for major repairs such as roof, foundations, cladding and joinery.
• Developing a set of principles for the guidance of trustees and all future generations of trustees.

Smith and Partners has expert trust practitioners who can advise Maori families on the appropriate changes to their Trusts that should be made to enable Maoritanga to be embedded in a Trust Deed. Smith and Partners can also assist with drafting new trust deeds consistent with the values of Maoritanga.

Ready to align your family trust with Maoritanga values? Our expert trust practitioners at Smith and Partners are here to guide you. Contact us today for tailored advice and personalized solutions to preserve your legacy. Your heritage, your trust – let’s ensure they thrive together.

Contact Peter Smith:

Phone: 09 837 6882

Email: peter.smith@smithpartners.co.nz