Family trust changes making it mandatory for assets in two Manawatu farming trusts to be divided equally between four adult children on death of their widowed mother were given Trusts Act ‘blessing’ by the High Court. Trustees took this action to block acrimonious litigation following the 2017 death of patriarch Dennis Terry.
Two family trusts established three decades ago in the names of the now deceased Dennis Terry and now widowed Christine Terry each own one of two farms near Palmerston North. One is farmed by son Nigel; the other by son Simon.
Their siblings are Lynda and Paula.
The High Court was told of multiple disputes between family members after Dennis’ death about the distribution of assets held by his estate and assets held by the two family trusts.
Writs flew, with Family Protection Act and Law Reform (Testamentary Promises) Act claims filed. Primary complaint is the level of compensation Lynda and Paula might receive after ownership of the two farms later passes from the family trusts to their brothers.
Independent trustees were appointed, taking control of trust assets.
They arranged an August 2025 mediation, attempting to resolve family differences. All four children participated; daughter Paula by Zoom from her New York home.
Agreement was reached between three of the children and their mother, but not Paula.
Put to the High Court for approval was a scheme which would see all farming assets come back under direct ownership of their respective family trusts, with Nigel and Simon given rights of first refusal to buy back ‘their’ farm at market price on death of their mother.
This does not preclude them from leasing each of the farm properties in the interim.
When trust assets are cashed up on their mother’s death, net proceeds are to be split equally between all four siblings.
This proposal required removal from each trust deed an existing trustees’ discretionary power to allocate trust assets between beneficiaries, otherwise trustees might later depart from the equal-shares mediation agreement.
In the High Court, Justice Gendall approved the proposed changes. These changes remove ongoing litigation costs and reduce further cost and complexity in trust operations, he said.
The changes are also binding on Paula as beneficiary, despite her not agreeing to terms of the mediation agreement.
Terms are fair to Paula, Justice Gendall said. She is expected to get a more substantial payout on death of their mother than if current disputes drift on.
Bringing all farming assets back under complete control of current trustees saw Nigel’s current one quarter share in one farm bought back for $1.05 million and Simon’s interest in the second taken back at a price of $250,000.
It was further agreed that their mother, in her lifetime, would not make annual gifts out of trust assets to her children and grandchildren exceeding $20,000 each.
Terry v. Hadwin – High Court (15.12.25)
26.055