All View Legal trust deeds automatically disqualify an individual trustee or principal who dies, loses capacity or becomes bankrupt.
Where that individual is disqualified, the trust deed specifies who succeeds them in that role and allows an individual to nominate their preferred successor.
In addition to the scenarios above (death, loss of capacity or bankruptcy), View Legal’s trust deeds include an option to include a relationship breakdown as an event of disqualification.
‘Relationship breakdown’ is defined with reference to the Family Law Act and includes the breakdown of a de facto relationship.
Where this clause is included, an individual occupying the role of trustee or principal will be automatically removed from that role if they suffer a relationship breakdown.
The option should generally be selected where a trustee, principal or key person behind establishing the trust is concerned about the exposure of trust assets in the event of a relationship breakdown and is comfortable for another person to assume ultimate control of the trust in these circumstances.
How useful the provision will be in the event of a relationship breakdown will depend on a range of issues and specialist advice should be obtained before relying on the provision.