Other Estate Claims

Other Estate Claims

Removal and Appointment of Trustees

When you create a trust, you will need to appoint trustees. Trustees are responsible for administering the trust’s property and income to the trust’s beneficiaries. The trustee has a fiduciary duty to act in the best interest of the trustees. Trustees are appointed in one of three ways: 

1. A Trust Deed – A Trust Deed names the person or persons who are to act as trustee(s) of the trust. A trust deed usually contains a clause explaining how a trustee is to be appointed. 

2. Statutory Power – They may be no specific clause in the trust deed which details how trustees are to be appointed. In such a scenario, a trustee can be appointed under legislation. Under section 6 of the Trustee Act 1925 (NSW) (‘Trustee Act’) a trustee cane be appointed by way of registered deed; and 

3. A court may also appoint a trustee. 

A trustee can be an individual or a company. An individual trustee can act in their personal capacity as trustee of the trust. The advantage of having an individual as a trustee is the reduced complexity and costs. 

It is also common for a company to be incorporated as trustee for a trust. Some benefits of appointing a company as trustee include the ease of succession, asset protection and separation of personal assets from trust assets:   

1. Ease of Succession: Unlike an individual trustee, companies can exist indefinitely. A corporate trustee does not end upon the death of one its shareholders or directors; 

2. Separation of personal assets from trust assets: Having a corporation as trustee makes it easier to keep trust assets separate from personal assets, as they are held in a different name; and

3. Asset Protection: The sole purpose of the corporate trustee is to act as a trustee, meaning that it should not be exposed to any liability. Appointing a company as trustee means that your business assets may be protected. 

A trustee may need to be removed as trustee for various reasons. Some of these reasons may include that the trustee has breached their fiduciary duties and the trustee may not have acted in the best interests of the beneficiaries. 

A trustee may be removed in one of two ways. The trust deed may have an express clause outlining the power to remove the trustee and appoint a new one. However, if the trust deed does not have an express clause in the deed, you can seek to have a trustee removed by the court under the Trustee Act. Under the Trustee Act, a beneficiary can approach the court to intervene in their trust and appoint a new trustee to replace the old one. 

Here at Green & Associates Solicitors, we are able to provide you with expert advice so that you can appoint and/or remove trustees from your trust. You may contact us on (02) 8080 7585 for a consultation. We also provide in-house advice to companies on a range of matters, including:

Let’s get you results

Have us in your corner. We have the knowledge and experience to get you the outcomes you deserve
Colan Chin