In New Zealand law, a ‘trust deed’ is the legal document that outlines the specific details of a trust, including who the beneficiaries are, the trustee's powers, and how the trust property should be managed.

‘Terms of trust’ refers to the overall rules and conditions governing how the trust operates, which are primarily defined within the trust deed itself. Essentially, the trust deed is the written form of the ‘terms of trust’ for a particular trust. 

Key points 

Trust Deed

The formal document that creates a trust, setting out the key details like who the settlor (creator), trustees, and beneficiaries are, and the specific rules for managing the trust property. 

Terms of Trust

The fundamental rules and conditions that dictate how a trust is set up, how it operates, and how its assets are managed and distributed. These terms are primarily, and most definitively, set out within the trust deed itself. 

The trust deed is the governing document, and while it must clearly identify the beneficiaries, it also specifies many other crucial operational guidelines.

Examples of what the Terms of Trust (as found in the trust deed) might specify include:

• Powers of the Trustees: What the trustees are allowed to do with the trust property (e.g., whether they can invest in shares, buy or sell land, take out loans, or give a mortgage over trust property).
  
  
• Distribution Powers: Whether the trustees have the discretion to choose which beneficiaries receive distributions, when, and how much (often referred to as 'discretionary beneficiaries'), or if distributions are mandatory.
  
  
• Trustee Appointments and Removals: The process for appointing new trustees or removing existing ones, and whether there must always be a certain type of trustee, such as an independent trustee.
  
  
• Winding Up the Trust: The conditions or dates under which the trust must eventually be ended and its assets distributed (e.g., the vesting date or perpetuity period).
  
  
• Beneficiary Categories: While beneficiaries are named, the deed might also define categories of beneficiaries (e.g., 'primary beneficiaries,' 'final beneficiaries,' 'discretionary beneficiaries') and the different rights or entitlements attached to each category.