[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-165290-en":3,"doc-seo-165290-105":30,"detail-sidebar-cat-1-en-105":90},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":11,"category_id":12,"category_name":13,"doc_title":14,"doc_description":15,"doc_content":16,"file_id":17,"file_url":18,"file_type":19,"file_size":20,"view_count":11,"is_deleted":4,"is_public":11,"is_downloadable":11,"audit_status":11,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":27,"seo_description":15,"update_tm":28,"read_time":29},165290,5909877438554,"Maeve","https://ap-avatar.wpscdn.com/avatar/5600025385ad2bf12a7?_k=1778553567797529272",1,18,"Letters","A Trustee’s Guide to Litigation Pitfalls","A Trustee’s Guide to Litigation Pitfalls explains how accepting a trustee role can quickly expose individuals and professional trustees to litigation risk. It focuses on practical checks before appointment: reviewing the trust deed, identifying beneficiaries and possible conflicts, understanding indemnity clauses and debt exposure, and confirming proper management through accounts and trust records. It also outlines core trustee duties, reporting and compliance obligations, the role of a settlor’s wishes, and situations where the settlor or trustees can be bypassed by beneficiaries.","A Trustee’s Guide to Litigation Pitfalls\nBy Kate Davenport QC &\u000bLama Almoayed\nKate Davenport QC practices at Bankside Chambers in Auckland and has extensive experience at litigating issues arising out of trustee’s obligations and is a contributing editor to LexisNexis Law of Trust.  Lama Almoayed is a junior barrister at Bankside Chambers.\nIt is often a surprise for lawyers, who have cheerfully assumed the role of a trustee, to realise how easily they can be exposed to litigation risk.  This is particularly true for those who accept the role as independent trustee for private clients.  Marriages all too frequently crumble and the disgruntled children of earlier marriages can make life difficult for trustees.  This short article addresses some of the pitfalls which a prudent trustee should consider and (hopefully) avoid.\nHere are some things that you might like to consider before agreeing to become a trustee.\n1.\tWhat is in the trust deed?\nThis might seem self-evident however many trustees do not acquaint themselves with the terms of the trust.  A common form of trust are those benefiting a large class of discretionary beneficiaries that give trustees wide powers.  However, older trusts sometimes limit the powers of trustees, limit classes of beneficiaries, or prevent trustees from charging for their time or making decisions which benefit themselves (which is potentially tricky if a trustee is also a beneficiary).  The lesson to be learned is: know the trust before you make any decision, in order to prevent problems cropping up later.\n2.\tKnow who you are dealing with and what pitfalls you might face\nIt is very important that you understand exactly who the potential beneficiaries of the trust are.  If the trust has a husband and wife as settlors, and the primary beneficiaries are the couple and their children, understand what their needs might be, ask what will happen in the (hopefully unlikely) event that the couple separate.  Do they have a joint power of appointment?  What will happen if they cannot agree on what is to happen to the trust on separation?  Will they both agree to resign in these circumstances and allow the independent trustee to appoint someone else with him or her to administer the trust property for the benefit of the estranged couple and their children?  All too frequently independent trustees of “family trusts” can end up taking the side of one spouse over the other.  This should be avoided at all costs.  If in doubt as to what to do, seek advice.\n3.\tConsider the indemnity clauses and what protection they offer\nMany trustees now opt to become trustees through a trustee company, giving them protection from potential exposure to litigation, but a trustee should ensure that the indemnity extends not only to the trustee personally, but also the directors of any trustee company.  Remember, an indemnity clause may not cover breach of trust.\nUnderstand what the debt positon of the trust is and your potential exposure.  Can the trust service its debts?  What indemnities have been given to previous trustees?  Trustees should be aware of a recent decision that says that trustees (including former trustees) can caveat the title of trust property to protect their indemnity.\nSome trust deeds provide for a majority decision of trustees but this has potential risks too – in what circumstances is a majority decision not permissible?  For example, does it cover sale of all trust assets?  Check that any land owned is unencumbered or if not, understand the extent of any mortgages secured over the land.\n4.\tHas the trust been well managed?\nFamily trusts which own property now require an IRD number.  A prudent new trustee should ask to look at the accounts and understand the financial position of the trust.  This can be particularly important when dealing with clients who have had more than one marriage and where there is likely to be competition for the financial resources of the trust between children of different marriages or ","cbCaiizNrPRNdJ1f","https://ap.wps.com/l/cbCaiizNrPRNdJ1f","docx",31440,6,"English","en",105,"# Key Pre-Appointment Pitfalls\n## Review the trust deed\n## Identify the beneficiaries and manage conflicts\n## Indemnity clauses and protection limits\n## Check management, records, and accounts\n## Core duties and legal/compliance obligations\n## Settlor wishes and trustee documentation\n## When beneficiaries may end the trust\n## Trustees are accountable and must actively administer","[{\"question\":\"What should a prospective trustee review before agreeing to act?\",\"answer\":\"Review the trust deed terms carefully, especially any limits on trustee powers, beneficiary classes, charging for time, and restrictions that could affect decisions or self-benefit scenarios.\"},{\"question\":\"How can trustees avoid taking sides between beneficiaries in family trusts?\",\"answer\":\"Understand the beneficiaries and the settlors’ positions, including what happens on separation, resignation, and appointment of replacements. Seek advice if unsure to prevent biased administration.\"},{\"question\":\"What key protections should trustees verify in indemnity and trust structure?\",\"answer\":\"Ensure the indemnity covers not only the trustee personally but also directors of any trustee company, confirm exposure based on the trust’s debt position, and recognize that indemnity clauses may not cover breach of trust.\"}]","A Trustee’s Guide to Litigation Pitfalls | DOCX",1788168952,2,{"code":4,"msg":31,"data":32},"ok",{"site_id":24,"language":23,"slug":33,"title":14,"keywords":34,"description":15,"schema_data":35,"social_meta":85,"head_meta":87,"extra_data":89,"updated_unix":28},"a-trustees-guide-to-litigation-pitfalls","",{"@graph":36,"@context":84},[37,53,67],{"@type":38,"itemListElement":39},"BreadcrumbList",[40,44,47,50],{"item":41,"name":42,"@type":43,"position":11},"https://docshare.wps.com","Home","ListItem",{"item":45,"name":46,"@type":43,"position":29},"https://docshare.wps.com/template/","Template",{"item":48,"name":13,"@type":43,"position":49},"https://docshare.wps.com/template/letters/",3,{"item":51,"name":14,"@type":43,"position":52},"https://docshare.wps.com/template/a-trustees-guide-to-litigation-pitfalls/165290/",4,{"url":51,"name":14,"@type":54,"author":55,"headline":14,"publisher":57,"fileFormat":60,"inLanguage":23,"description":15,"dateModified":61,"datePublished":61,"encodingFormat":60,"isAccessibleForFree":62,"interactionStatistic":63},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":41,"name":58,"@type":59},"DocShare","Organization","application/vnd.openxmlformats-officedocument.wordprocessingml.document","2026-08-31",true,{"@type":64,"interactionType":65,"userInteractionCount":11},"InteractionCounter",{"@type":66},"ViewAction",{"@type":68,"mainEntity":69},"FAQPage",[70,76,80],{"name":71,"@type":72,"acceptedAnswer":73},"What should a prospective trustee review before agreeing to act?","Question",{"text":74,"@type":75},"Review the trust deed terms carefully, especially any limits on trustee powers, beneficiary classes, charging for time, and restrictions that could affect decisions or self-benefit scenarios.","Answer",{"name":77,"@type":72,"acceptedAnswer":78},"How can trustees avoid taking sides between beneficiaries in family trusts?",{"text":79,"@type":75},"Understand the beneficiaries and the settlors’ positions, including what happens on separation, resignation, and appointment of replacements. Seek advice if unsure to prevent biased administration.",{"name":81,"@type":72,"acceptedAnswer":82},"What key protections should trustees verify in indemnity and trust structure?",{"text":83,"@type":75},"Ensure the indemnity covers not only the trustee personally but also directors of any trustee company, confirm exposure based on the trust’s debt position, and recognize that indemnity clauses may not cover breach of trust.","https://schema.org",{"og:url":51,"og:type":86,"og:title":14,"og:site_name":58,"og:description":15},"article",{"robots":88,"canonical":51},"index,follow",{"doc_id":7,"site_id":24},{"code":4,"msg":5,"data":91},[92,97,102,107,112,117,122,125,130],{"id":93,"doc_module":11,"doc_module_name":46,"category_name":94,"show_sort_weight":95,"slug":96},11,"Presentations",90,"presentations",{"id":98,"doc_module":11,"doc_module_name":46,"category_name":99,"show_sort_weight":100,"slug":101},12,"Resumes",80,"resumes",{"id":103,"doc_module":11,"doc_module_name":46,"category_name":104,"show_sort_weight":105,"slug":106},14,"Invoices",70,"invoices",{"id":108,"doc_module":11,"doc_module_name":46,"category_name":109,"show_sort_weight":110,"slug":111},15,"Posters",60,"posters",{"id":113,"doc_module":11,"doc_module_name":46,"category_name":114,"show_sort_weight":115,"slug":116},16,"Social Media",50,"social-media",{"id":118,"doc_module":11,"doc_module_name":46,"category_name":119,"show_sort_weight":120,"slug":121},17,"Forms",40,"forms",{"id":12,"doc_module":11,"doc_module_name":46,"category_name":13,"show_sort_weight":123,"slug":124},30,"letters",{"id":126,"doc_module":11,"doc_module_name":46,"category_name":127,"show_sort_weight":128,"slug":129},21,"Paper Templates",5,"papers-templates",{"id":131,"doc_module":11,"doc_module_name":46,"category_name":132,"show_sort_weight":4,"slug":133},158,"General","general-158"]