In this edition of It depends, partner Scott Hay-Bartlem discusses whether your family discretionary trust needs an appointor.
Video Transcript
Welcome to this edition of It depends, where we’re talking about ‘does my family discretionary trust need an appointor?’
What is an appointor?
So, an appointor is the person whose role is set out in the terms of the trust deed itself. Sometimes they’re called principals, sometimes they’re called guardians. They’ll have a number of possible roles, but generally they have the power to appoint and remove the trustee. So, the trustee makes the day-to-day decisions but the appointor, if where they’re not happy with what the trustee is doing, can remove them and appoint themselves or someone they control to take the role instead. Very important role in a trust.
Why have an appointor?
So, having an appointor of a trust, allows someone to have the control over who the trustee is. You can have somebody else or a company sitting there as trustee, but you as the appointor, can decide to remove that trustee, put somebody else in control and take back control of that trust.
Does a family discretionary trust need an appointor?
Well, this is the It depends. So, there is no legal requirement that a family discretionary trust must have an appointor. Most family discretionary trust these days do have one and their role, as I said earlier, will depend upon what’s in the deed, but it’s not essential. So, sometimes with a family discretionary trust we set it up with no appointor or we remove the role of an appointor at some point or for example, on the death of the principals of the trust. Now, if you don’t have an appointor the trustee will decide who the trustee is. Now, we will do this, for example, in an estate planning or a family business scenario where you’ve got fairly complicated and detailed rules making up the trusteeship and typically control of a company as trustee, and having someone else who can appoint or remove the trustee would mess up that planning. So, no appointor is something to think about.
If you’ve got any questions about appointors or trusts, there’s a few other It depends on this, but please contact a member of our team. Thanks for watching this edition of It depends.
