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Who to appoint: the role of an Appointor

Are you the trustee of a discretionary trust or a family trust? If so, do you know who is the appointor of the trust?

An appointor of a trust is an important role. It is a position of power and control. Some trust deeds may call the appointor, a guardian or a principal.

The appointor has the power to remove the trustee of the trust and appoint a replacement. It follows that the appointor may ultimately control the trust. Often the actions of the appointor can have far reaching effects on the beneficiaries of a trust if the appointor uses his or her power to change the trustee and in doing so “side line” some of the beneficiaries.  It must be remembered that it is the decision of the trustee to decide who will receive income of the trust (and also capital).

Usually, an appointor must consent to any variations or amendments proposed to a trust deed.

It is important to consider the following when choosing the appointor:

  • If there is more than one appointor, do they appointors act unanimously, or does majority rule?
  • What happens if there is a dispute between the appointors?
  • What happens when an appointor dies, becomes bankrupt, is involved in a marital breakdown, or suffers from total or permanent disability (but does not die)?
  • What if the appointor acts fraudulently?

The solicitors at Mullane & Lindsay have the experience to advise when establishing a discretionary trust and also as to the appropriate appointor of the trust.

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