A family trust can often be the right vehicle to carry on your family business and manage family wealth.
Much time is often spent deciding who will be the trustee and the trust's beneficiaries. However, the issue of who should be the Appointor can often be overlooked. However, careful consideration needs to be given to how the trust is established and administered to ensure that the ultimate control of your income and assets rests in the right hands and is in line with your family's strategy.
A trustee has the power to administer and distribute income and capital, as well as deal with the assets of the trust. Accordingly, the Appointor named in the trust deed has ultimate control of the trust. The Appointor has the power to remove and appoint a trustee at any time.
As families grow and change over time, the Deed must be reviewed promptly to ensure that the named Appointor is appropriate.
Things to consider when selecting an Appointor:
- Who is the Appointor named in the Deed? Is that person appropriate given your family's current circumstances and in line with your family's estate plan?
- Should the Appointor be a person or a company?
- If the Appointor is a company, consideration must be given to who should own the shares.
- If the shares in the Appointor company are held jointly, through appropriate estate planning, the control of the trust's assets, income, and capital can remain outside of the Estate of a deceased family member.
As part of your annual compliance review, it is important to pause and consider who is your trust's Appointor. Selecting an appropriate Appointor doesn't have to be a daunting task. Reach out to talk through your specific requirements. Our team at Grant Thornton can assist you in making the best decision to ensure your desired outcomes are met and appropriate planning is made for the future.
Written by Heather Gouveia
|Heather Gouveia | Director - Private Business Tax & Advisory
Heather has over 30 years' of experience providing taxation and advisory services to medium-sized, privately-owned businesses. Heather enjoys working collaboratively with clients to provide holistic, practical advice tailored to the clients' specific business and family goals. Having worked with businesses in all stages of their business lifecycle,
Heather understands the challenges facing family-owned businesses and her experience includes:
Heather is particularly passionate about providing holistic advice at both the business and owner levels to ensure both business and personal financial goals are achieved.
The views expressed in this content are those of the author, who is also responsible for any errors and omissions. Family Business Australia and New Zealand provides this article for your information only. The content of the article should not be taken as advice. If you wish to explore this topic, please consult an advisor who you consider to have the expertise to provide specific advice in relation to your family business.