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Appointor; power of appointment

This category contains 11 posts

Two trustees go down to the woods … one is discharged, one is not

The use of corporate trustees is a common response to trustee liability.  However, where one of two natural person trustees retires and a corporate trustee is appointed, it is important to consider whether the retiring trustee has been discharged.  See ss 43, 45 and 46 of the Trustee Act 1956, which provide: Relevant Legislation 43 Power … Continue reading

A sorry tale …

As noted in the judgment McLaren v McLaren at [1]  this case relates to “… a sorry tale of what can occur when a family adopts an inappropriate form of trust deed without adequate advice or sufficient understanding of the legal effect of its terms. In this case, a son who was given a power … Continue reading

Emerging failure

Mr White established the Rex White Family Trust (the Trust) in 1992 to hold an inheritance he  received from his mother.  The trustees of the Trust were Mr Davis and the solicitor who prepared the trust deed, Mr McNiece (together the Trustees). Mr White’s wife was not aware of the trust at the time, although she had … Continue reading

Disclosure creep

Trusts can be many things.  Well run trusts can provide long-term inter-generational asset protection.   When the pie does not get split on the death of each generation, there can be greater potential for  wealth generation.  Trusts are also generally very private.  Trust ownership is not noted on land titles or in the Companies Office. But will this … Continue reading

Can a non-fiduciary owe fiduciary obligations?

In the Matter of the Piedmont Trust and the Riviera Trust powers of appointment and who can exercise them are an important aspect of both the management of a trust, and the very terms on which a trust is settled.  It is now generally agreed that  whether the powers are held by a trustee or a … Continue reading

The Price of Principles

Principles are important. But who should fund them? When acting as a trustee, it is generally accepted that the trustee will be reimbursed by the trust for any costs incurred.  However, it is important to appreciate that this principle has a caveat – the costs must be reasonably incurred. New Zealand Māori Council v Foulkes … Continue reading

Mixing oil and water

Trusts and marriage break ups are a tricky thing to manage – like trying to mix oil and water more often than not.  Some trustees can put personal differences aside and get on with it, most, it appears, can’t.  Often the pragmatic (and ultimately cost effective as it breaks deadlocks) solution is the removal of … Continue reading

Trustees left holding the baby

SWL Trustee Company Limited (SWL) is a trustee that acts together with two other trustees as trustees of a family trust.  As is commonly the case, two of the trustees (the instructing trustees) are also settlors of the trust.  The trust owns a number of properties.  All is fine, until it is not.  The trust owns a number of properties.  … Continue reading

Trustees and dementia

The early signs of dementia can be subtle.  Although dementia can occur at any age, it is far more common amongst the older demographic. Accordingly, while lawyers and accountants, and trustees generally are rarely mental health experts, it is important to say alive to the early signs of dementia so that risks can be identified … Continue reading

Removal of trustee to avoid demand

Buying the family farm can seem a rite of passage.  However, given the value of most farms inter-generational assistance can be required so that this can happen.  Commonly, this assistance can take the form of an on-demand loan.  While not stated, the practical reality is that if the children stay in Mum and Dad’s favour, no demand … Continue reading