Do you know who has ultimate control of the income and assets of your family trust?

However, careful consideration needs to be given to how the trust is established and administered to ensure that the ultimate control of your income and assets rests in the right hands and is in line with your family strategy. Much time is often spent deciding on who will be the trustee and the beneficiaries of the trust, however the issue of who should be the appointor can often be overlooked.

Whilst the trustee of a trust has power to administer and distribute income and capital, as well as the power to deal with the assets of the trust, the Appointor has the power to remove and appoint a trustee at any point in time. Accordingly, the Appointor who is named in the trust deed has ultimate control of the trust.

As families grow and change over time, it is very important that the Deed is reviewed on a timely basis to ensure that the named Appointor is appropriate.

Things to consider when selecting an Appointor:

1. Who is the Appointor named in the Deed? Is that person appropriate given your family’s current circumstances and in line with your family’s estate plan?
2. Should the Appointor be a person, or alternatively a company?
3. If the Appointor is a company, consideration must be given to who should own the shares.
4. If the shares in the Appointor company are held jointly, through appropriate estate planning, the control of the trust’s assets, income and capital can remain outside of the Estate of a deceased family member.

As part of your annual compliance review, it is important to pause and consider who is your trust’s appointor. Selecting an appropriate Appointor doesn’t have to be a daunting task. Our team can assist you in making the best decision to ensure your desired outcomes are met and appropriate planning is made for the future. Reach out to talk through your specific requirements.

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