What is the difference between the trustee of a trust and an appointor?

The trustees are appointed to manage the day-to-day operations of the trust. Including the management, the buying and selling of assets belonging to the trust, and distributions to beneficiaries.

The appointer can change the trustees, removing and adding new ones as they see fit, however, unlike the trustee, the appointer has little to no input into the operation of the trust aside from this. A person who is the appointer of a trust can also be the trustee of the same trusts.

What are common problems that people can run into with their appointers and trustees?

By far one of the most common issues that we see when reviewing trusts, is a failure to allow for a change of appointer with a will. A change of appointer is usually executed by written instrument (such a variation of trust or by the appointers Will), however, there must be a clause within the original trust deed to let a will do so. The following is an example of this issue:

Greg is the appointer and trustee of the Gregs Family Trust, which distributes to his wife and children as beneficiaries. The trust deed does not have a clause to change appointer through his will. Greg dies and the trust cannot be varied, and no new trustees can be appointed in a traditional manner. Under the Trustees Act 1958, the executor of Gregs will, his wife, becomes the trustee, however, she will need to apply to the Supreme Court to vary the terms of the trust to appoint said executor as appointer and to allow for the appointers will to appoint new trustees and appointers through a will.

This is a very timely and costly process and can cause additional stress for your executors in an already difficult time, it is paramount that your trust allows for you to appoint an appointer through your will.

If you need to vary the terms of your trust, or wish to have a trust deed drawn up, please contact our office on 03 9707 1155.