Strategy: Backup Appointors of Trusts

Strategy: Backup Appointors of Trusts

People that are appointors of family trusts usually give little thought to what can happen to the trust when they die. They generally give even less thought to what could happen if they lose capacity.


It could be that the person they appoint as their personal attorney, under an enduring power of attorney (ePOA) appointment, will control the trust if the appointor loses capacity. Furthermore, If the power commences immediately the attorney could immediately control the trust even while the current appointor has capacity!


I think a good trust deed will automatically remove the appointor, as the appointor, if they lose capacity. In these cases a backup appointor is needed – either built into the trust, or via a separate deed.


But where the deed doesn’t remove the appointor any person’s personal attorney could end up controlling the role of the appointor and thereby the control of the trust.


To avoid this, the following could be done:

a) Appoint a backup appointor under a separate deed,

b) Allow for the appointment to terminate if capacity is regained

c) In any ePOA documents restrict the powers so that the attorney cannot exercise your powers of appointment under a trust.


However, if the choice of the backup appointor is the same as the person being appointed under a power of attorney then the risk is lower.


Seek a advice from a lawyer concerning both the trust succession of appointor role and the appointment of an enduring attorney.