An often posed question in relation to trust structuring is – why is it that some trusts (including testamentary trusts) have appointor or principal powers, whereas others do not?
As is the case in many estate, trust and tax planning issues, the answer is often that ‘it depends’ on the exact factual matrix.
Very broadly we recommend an appointor role be used where there is a desire by the willmaker or person establishing the trust to ensure particular people have ultimate power to mandate control of the trust. That is, by having the right to remove an incumbent trustee – regardless of who the trustee is from time to time.
Some of the factors that can be relevant in this regard are as follows:
Ultimately, the most critical issue generally is that regardless of whether there is an appointor role there must be a disciplined approach to understanding the terms of the trust deed; this starts with following the mantra ‘read the deed’ – and ensuring specialist advice is obtained as appropriate.
For a printable version of this information, refer to the attached flyer.