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If an Appointor in a Discretionary Trust gets sued, is the Trust in danger?

As per our legal team who creates the Trust deed, the potential danger lies in whether the powers of the appointor can be considered as property If they are categorised as such, a trustee in bankruptcy, for instance, might have the ability to acquire and use these powers to appoint a trustee responsible for distributing assets to creditors, among other tasks. Unfortunately, it remains uncertain whether a trustee in bankruptcy has this capability.
However, even if this were possible (which is still unclear), an appointor is expected to exercise their powers in line with their fiduciary duties, meaning they should act in the best interests of all the trust beneficiaries.
Ultimately, this is a complex legal matter that requires specific legal advice. Nonetheless, as per our current deed, the office of an Appointor will be vacated if that Appointor:
(a) becomes bankrupt or seeks relief under bankruptcy laws; or
(b) acts as a trustee in bankruptcy, liquidator, administrator, or the Family Court
This provision is designed to enhance the trust’s security in case an appointor faces legal action.
Furthermore, having an independent appointor, like a trusted family accountant or
solicitor, can also bolster the trust’s security. This is because the deed mandates that appointment decisions must be made jointly, requiring unanimous agreement among the appointors.