Missing trust documents: what can be done?

One of the most common issues with older family trusts is incomplete documentation.

Sometimes the original trust deed cannot be found. Sometimes there are missing deeds of appointment and retirement of trustees. Sometimes there are no trustee resolutions, no records of distributions, no financial statements, no letter of wishes, or no clear record of why important decisions were made.

For many years, families often treated trust records quite casually. Documents were held by a lawyer, accountant, trustee, settlor or family member. When people moved firms, retired, died, separated or sold a property, records were not always transferred properly. The trust may still have continued to operate, but the paper trail became patchy.

That is now causing problems.

Trust administration has become more formal. AML requirements, bank processes, IRD information, LINZ requirements and the Trusts Act 2019 all place greater importance on having complete and reliable trust records. When those records are missing, even a simple trust matter can become slower, more expensive and more difficult to complete.

Why trust records matter

A trust is not just a name on a property title or a folder that was set up years ago. It is a legal relationship. The trustees hold and deal with trust property for the benefit of the beneficiaries and in accordance with the trust deed.

To do that properly, trustees need to know what the trust deed says. They need to know who the current trustees are, who has power to appoint and remove trustees, who the beneficiaries are, what assets the trust owns, what decisions have been made, and whether the trust has been administered in accordance with its terms.

If the documents are incomplete, it may be difficult to answer even basic questions. Who are the trustees? Was a trustee properly appointed? Did a trustee retire correctly? Was a distribution authorised? Has the trust deed been varied? Does the trust still have the power to do what the trustees now want to do?

These are not just administrative questions. They affect whether trustees can validly act.

What the Trusts Act requires

The Trusts Act 2019 sets out record-keeping obligations for trustees.

Trustees must keep the core trust documents, so far as is reasonable. These include the trust deed and any documents containing the terms of the trust, variations to the trust deed, records of trust property, records of trustee decisions, accounting and financial records, contracts entered into by the trustees, appointment and removal documents, letters of wishes, and other documents necessary for the administration of the trust.

Where there is more than one trustee, each trustee must keep a copy of the trust deed and any variations. At least one trustee must keep the other core documents. This does not mean the documents can be left with one person and forgotten about. The trustees should know where the records are held and should be able to access them when needed.

A trustee must keep the documents for the duration of their trusteeship. When a trustee retires, is removed, or otherwise stops acting, the documents must be passed on to at least one continuing or replacement trustee.

The practical effect is that trust records should be preserved for the life of the trust. They should not be treated like ordinary files that can be destroyed after a limitation period has expired. A trust may continue for decades. The next trustee, the next lawyer, the accountant, the bank, Inland Revenue, beneficiaries or the Court may need to understand what has happened during that time.

Why limitation periods are not the right guide

Clients sometimes ask whether old trust documents still matter if they are more than seven years old.

For ordinary business records, people often think in terms of tax record periods, limitation periods, or old file destruction policies. Trust documents are different. The trust deed, variations, appointment and retirement deeds, trustee decisions and key administration records are part of the trust’s history. They explain the authority under which trustees have acted and the basis on which trust property has been dealt with.

A trustee may need to prove that a decision was made properly many years after the event. A beneficiary may ask for information. A bank may ask for the chain of trustee appointments. A lawyer may need to update a title. Inland Revenue may need trust details. A later trustee may need to know whether a distribution was a gift, loan, forgiveness of debt or beneficiary entitlement.

If the record is missing, everyone is left trying to reconstruct the position.

AML and incomplete trust records

AML requirements have made incomplete trust documents more noticeable.

When a lawyer carries out customer due diligence for a trust, the lawyer needs to understand the trust structure. This usually involves reviewing the trust deed, confirming the current trustees, identifying people who control the trust, and understanding the nature and purpose of the work.

If the trustee records are incomplete, the AML process can become difficult. It may not be clear who the current trustees are. It may not be clear whether a person signing documents has authority to act. It may not be clear who has power to appoint or remove trustees. There may be uncertainty about beneficiaries, settlors or people with control powers.

This does not necessarily mean anyone has done anything wrong. In many cases, it simply means the trust has not been administered carefully over time. However, lawyers, banks and other reporting entities cannot simply ignore missing documents. They need to be satisfied about who they are dealing with and whether the people giving instructions have authority.

What banks may ask for

Banks can be particularly strict about trust documents.

If a trust has lending, bank accounts, a mortgage or an account mandate, the bank may ask for a full copy of the trust deed and any variations. It may also ask for deeds changing trustees, trustee resolutions, identification for trustees and other related parties, AML information, tax details and confirmation of who can sign for the trust.

Where the documents are incomplete, the bank may not be able to update its mandate or approve changes until the trustee position has been clarified. This can delay refinancing, property sales, property purchases, trustee changes and lending arrangements.

This is one reason trust record issues often come to light at the worst possible time. The family may not realise there is a problem until a bank, lawyer or purchaser’s solicitor asks for documents urgently.

Common documents that go missing

The most common missing trust documents include the original trust deed, deeds of variation, deeds of appointment and retirement of trustees, trustee resolutions, financial statements, records of advances or loans, beneficiary current account records, letters of wishes, gifting documents, forgiveness of debt documents and old correspondence explaining important decisions.

Sometimes the trust deed is available but later documents are missing. In other cases, the title to a property still records trustees who have retired or died, but the family cannot find the deeds showing how the current trustees were appointed.

There may also be gaps where the trust has changed lawyers or accountants. One adviser may have held some records, another adviser may have held others, and the trustees may have assumed everything was safely held somewhere.

Why missing records can affect trustee changes

Incomplete documents often create problems when trustees are changed.

Before a trustee can retire or a new trustee can be appointed, the current trustees need to check the trust deed. The deed will usually set out who has the power to appoint and remove trustees, how that power must be exercised, and whether any consents are required.

If the trust deed or later appointment documents are missing, it may be difficult to confirm who currently has authority. If a previous trustee change was not completed correctly, that may need to be addressed before the next change can proceed.

This can add time and cost. It may require searches, reconstruction work, statutory declarations, legal advice, resolutions, deeds of confirmation or ratification, or in more serious cases an application to the Court.

Why missing records can affect property transactions

If a trust owns property, incomplete records can delay a sale, purchase, transfer or refinance.

The lawyer may need to confirm that the trustees signing the sale and purchase agreement or transfer documents are the correct trustees. LINZ records may need to be updated. If a trustee has died, retired or been replaced, the documents supporting that change may be required. If there is a mortgage, the bank may also need to be satisfied.

Where the trust records are complete, this is usually manageable. Where the documents are missing, the property transaction may be held up while the trustee history is checked and any gaps are addressed.

This is particularly frustrating where a settlement date has already been agreed. It is much easier to deal with missing trust records before a transaction is underway.

What trustees should keep

Trustees should keep a complete trust file.

At a minimum, this should include the trust deed, all deeds of variation, all deeds of appointment and retirement of trustees, records of trustee decisions, financial statements, accounting records, asset and liability records, bank documents, property documents, loan records, beneficiary account records, distribution records, letters of wishes, tax and IRD information, and important correspondence relating to the trust.

The records should be held in a way that is accessible to the trustees. It is not enough for one person to assume that another person has everything. At least one trustee should have a complete set of the core documents, and all trustees should know where the documents are kept.

For many trusts, it is sensible to have both a secure electronic copy and a physical copy of key signed originals.

What to do if documents are missing

If trust documents are missing, the first step is to work out exactly what is available and what is not.

Trustees should check their own records, previous lawyers, accountants, banks, family members and any storage files. Property title searches may help identify who was recorded as trustee at different times, but they will not usually provide the full trust history. Bank files may contain copies of trust deeds or trustee documents, although this is not always reliable.

Once the available documents have been gathered, the trustees can assess the gaps. Some gaps may be minor. Others may affect whether the trustee position is valid or whether past decisions can be properly explained.

The solution will depend on the nature of the missing documents. Sometimes a deed of confirmation or trustee resolution is enough. Sometimes the trustees need to reconstruct records from available evidence. Sometimes further legal advice is needed before anyone signs new documents.

This is not just paperwork

It is easy to see trust records as paperwork, but they are more than that.

Good records show that the trustees have understood their role, made decisions properly, and administered the trust in accordance with the deed. They help protect trustees if questions are asked later. They also help beneficiaries understand the trust and allow future trustees to continue the administration without starting from scratch.

Poor records create uncertainty. They make AML harder. They make bank processes harder. They make trustee changes harder. They make property transactions harder. They can also increase the risk of disputes between trustees, beneficiaries and family members.

A practical way to manage this 

Trustees should not wait until a property is being sold or a trustee is retiring before checking the trust records.

A trust review is a good opportunity to gather the core documents, identify any gaps, confirm who the current trustees are, check the powers in the trust deed, review the trust’s assets and liabilities, and make sure trustee decisions are being recorded.

If there are missing documents, it is better to find out early. Some issues can be fixed relatively easily if there is time. They become much harder when a bank is waiting, a purchaser is asking questions, or settlement is approaching.

Trust records should be kept for the life of the trust. They are part of the trust’s legal history, not ordinary old papers to be cleared out once a few years have passed.

For families with older trusts, this can feel like another administrative burden. In practice, it is one of the most useful things trustees can do. A complete trust file makes every future step easier, from AML checks and bank updates to trustee changes, property transactions and eventual trust wind-up.

How we can help

Missing trust documents are common, particularly with older family trusts. The important thing is to work out what is available, what is missing, and whether anything needs to be corrected before the trust is next used for a major decision or transaction.

We can help you review the trust records and identify the next practical steps.

Please get in touch to discuss or book an appointment.