In Aotearoa New Zealand, an independent trustee is a trustee who is not a beneficiary of a trust and is not entitled to share in the trust's assets. Trustees must act in the best interests of the beneficiaries. 

Trustees can be lawyers or accountants, but can also be a close family friend or other person. The trust deed sets out who and who cannot be a trustee. Some trust deeds may require an independent trustee. It is important to read the terms of the trust deed to determine whether an independent trustee is required.

While there is no legal requirement for a trust to have an independent trustee, they can be extremely beneficial: 

Interests of the vulnerable family member

An independent trustee can represent the best interests of the vulnerable family member after the settlor(s) have gone.

Transparency

An independent trustee can help ensure that the trust assets are managed properly, rather than being treated as personal assets. This can help prevent claims that the trust is a ‘sham’.

It can also help ensure the trust is transparent, and prevent other trustees with conflicts of interest from being able to act on them to the detriment of the beneficiaries.  Most of the trusts that are unwound by the Court are ones without independent trustees.

Impartiality

An independent trustee is more likely to be fair and equitable in their decisions because they don't benefit personally from the trust. 

Trust management and record keeping

An independent trustee can help ensure that proper procedures are followed and record keeping is completed. They can help ensure that the trust is operating as a trust, rather than as personal assets. 

Protection from claims

An independent trustee can also help protect the trust from claims a trust is a ‘sham’ by third parties or beneficiaries.