Types of trusts

A trust is created when a person or group of people are in a legal agreement to manage owners’ property or assets on their behalf.

It is a legal arrangement set out in a trust order.

How a trust should be run is governed by trust law, and in the case of Māori land, by Te Ture Whenua Māori Act as well.

Trust order

Every trust has a trust order which is written when the trust is set up.  The trust order (sometimes called a trust deed) sets out everything about what the trust is for, how it should operate, what it can do and who should benefit. Owners in the trust are usually referred to as “beneficiaries” or “beneficial owners”.

Types of trusts for Māori land

Te Ture Whenua Māori Act establishes five types of trust aimed at making the administration and management of Māori land easier:

  • Ahu whenua trust
  • Whenua topu trust
  • Whānau trust
  • Putea trust
  • Kai tiaki trust.

See the Māori Land Court website for information on all the types of trusts.

Te Tumu Paeroa generally deals with two types of trusts:  Ahu Whenua trusts and Whānau trusts.

Ahu Whenua

Most land that we work with is held in an Ahu Whenua trust.  The purpose of the trust is to manage the land itself for the benefit of the owners and gives the flexibility for commercial use of the land. 

An Ahu Whenua trust is usually set up after an owners' meeting where owners agree which blocks are included, the purposes of the trust and who will be nominated as trustees.  Owners may for instance want to make sure that a community purposes clause is included in the trust order so that money can be put towards maintenance of the marae, scholarships, kaumatua grants and other community purposes.

The application to set up the trust is then made to the Māori Land Court.

Te Tumu Paeroa can help owners through the process of setting up an Ahu Whenua trust.

Whānau trusts

Whānau trusts combine the ownership interests (shares) of a group of owners into one ownership or holding.  This type of trust does not manage the land itself, but manages the shares in the land.

A whānau trust can hold the shares for several blocks and makes decisions on behalf of the owners about income from the shareholdings.  For example, a whānau trust could decide to put the income from all the shares towards upgrading whānau housing or distribute the money to all the trust beneficiaries equally etc.

Many of Te Tumu Paeroa's clients are whānau trusts.  This means that
Te Tumu Paeroa will deal only with the trustees of the whānau trust, not the individual owners.  It is the whānau trustees’ responsibility to keep the beneficial owners in the trust informed.  For example the trust will be sent an invitation to an owners’ meeting and it is then the trustees’ decision about whether to send that invitation on to each beneficial owner represented by the trust.

Find out more about setting up a trust on the Māori Land Court website.