Blessing orders under the Trusts Act 2019: A timely reminder from Re McAulay‑Inui Family Trust [2026] NZHC 624.

Trustees are often asked to make high‑stakes decisions when exercising their discretion, whether distributing the trust fund, implementing a negotiated settlement, or deciding how to adjust funds between beneficiaries where prior benefits or personal circumstances complicate the outcome. In those moments, a directions application (often referred to in practice as a ‘blessing order’) can provide an important pathway to certainty, reduce the risk of later challenge, and allow trustees to proceed with confidence.

The High Court’s recent decision in Re McAulay‑Inui Family Trust is a useful reminder for trustees that directions are a powerful tool when used for the right reasons, but they are not a default step for routine trustee decision‑making.

What is a “blessing order” in New Zealand?

In New Zealand, what practitioners often call a ‘blessing order’ is typically achieved by an application for directions under section 133 of the Trusts Act 2019. Trustees ask the Court to direct or approve a proposed step in the administration of the trust (for example, a proposed distribution or a settlement implementation).

The practical attraction is section 134, in that a trustee acting under a Court direction is granted statutory protection and treated as having discharged trustee duties in relation to that direction, unless the trustee acted in bad faith in obtaining it.

The case: Re McAulay‑Inui Family Trust [2026] NZHC 624 (Powell J, 17 March 2026)

In Re McAulay‑Inui Family Trust, the trustees (Legal Trustees Ltd and Mr M) sought the High Court’s ‘blessing’ of a proposal to distribute all trust property under section 133 of the Trusts Act 2019 (or alternatively asked the Court to make its own distribution decision if required).

The trustees in this decision were grappling with whether any adjustment should be made in the proposed distribution for money already received by one beneficiary and/or having regard to the beneficiaries’ different personal circumstances. They were anxious to limit their liability to beneficiaries who were not aligned as to how the trust funds should be distributed.

Why this matters for trustees

A directions application can ‘take the heat out’ of a fraught decision and can be particularly useful where:

• the decision is momentous (e.g. winding up and distributing all trust property),
• there is a real prospect of challenge from one or more beneficiaries,
• there is uncertainty about power, process, or the proper approach to adjustments,
• there are minor, unborn, or unascertained beneficiaries whose interests may be affected, or
• trustees want the practical protection and finality that comes from acting under Court direction.

Equally, directions should not be treated as a rubber stamping exercise. The request engages the Court’s supervisory jurisdiction and is intended to be used where Court input genuinely adds value—for example, where there is real controversy, meaningful risk of later challenge, or a need to protect minors/unborn/unknown beneficiaries—rather than as a default “comfort letter” for ordinary trustee decision‑making.

Such directions applications can be slow and expensive, adding delay and raising the question whether the current approach to such applications is consistent with the Trusts Act 2019 principle of avoiding unnecessary cost and complexity. The application must be served on interested persons (as the Court directs), and the Court retains a discretion whether (and what) directions to give.

In short, s 133 directions are a valuable tool where there is genuine uncertainty or real challenge risk, because trustees who act under a Court direction gain the statutory protection of s 134. But the Court will expect a proper foundation (what the deed says, what orders are sought, jurisdiction, and beneficiary notice/representation), and will be wary of being asked to simply “rubber stamp” an ordinary trustee decision.

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