First, what is a trust?
Trust is a term used to describe a specific legal arrangement wherein a trustee is in ownership of a property that is beneficial to select beneficiaries within certain terms and conditions.
The foremost common examples of trusts include discretionary trusts, bare trusts, testamentary trusts, unit trusts, and superannuation funds. The process for replacing or removing a trustee in New South Wales, Australia can be seen below.
It is important to remember that these powers, in the hands of either or both the beneficiaries, and the Supreme Court of New South Wales, must not be used to punish or reprimand a past trustee. Rather, it is a protective power that may be utilized to secure the beneficiaries and their involved assets, in the case that it is compromised.
What is a trustee?
Being a trustee entails the need to abide by and perform duties related to the trust, such as the proper carrying out of the trust’s terms and conditions for the benefit of the beneficiaries, the administering of the trust’s affairs in a fair and just manner, the management and maintenance of the trust’s affairs.
The process of removing trustees
If a trustee is subject for removal, the process for this in New South Wales is consistently similar to those of other states in Australia.
There may be cases where a trustee is willing to resign, and to do so, they must submit a required notice of resignation. In some cases, it is indicated that a trustee may not step down unless a new trustee has been appointed, after which their resignation would be under effect.
If the beneficiaries are interested in replacing the trustee, the truth instrument must be inspected, as some may give beneficiaries certain powers that may be employed to remove the trustee.
If the trust has an assigned appointer, said appointer can designate a new trustee in place of the previous, and if the beneficiaries do not have the express power to reassign the trustee, the Supreme Court may do so.
The Supreme Court of New South Wales has the inherent authority for removing a trustee and also administers rules of equity, the considerations of which are much broader than those in the Trustee Act.
The Court may order the removal or replacement of a trustee in the case that it is to secure the trust property, it ensures the proper and efficient running of the trust, or it is in the beneficiaries’ interest to do so.
How to appoint a new trustee
To appoint a new trustee, a registered deed may be necessary, specifically in the case that a trustee wishes to be removed, has passed away, or will be predisposed for a prolonged period of time, without properly delegating their obligations.
This may also be used in the event that the trustee is a minor, has refused, or is no longer capable of continuing their duties and obligations.
Other situations that may be used as a basis to seek removal or reappointment include cases where the trustee has failed to perform any or all of their duties as a trustee, has engaged in some form of misconduct, or has exercised their given powers in a manner that is unfair or prejudicial to some or all of the beneficiaries.
The New South Wales Supreme Court may appoint a new trustee, under the constraints and powers of relevant trustee laws, and its inherent jurisdiction, with these powers in questions set out in the Trustee Act.
The aforementioned act also allows the court to intervene, and appoint if necessary, a new trustee when beneficial but not of personal interest, or impracticable without the assistance of the Court.
Certain examples of this include a current trustee having been convicted of a serious indictable offense, an existing trustee who was declared bankrupt, or a trustee corporation that has been dissolved or is under the process of liquidation.
If you want to know more everything about removal of trustees and appointing a new one, trust dispute lawyers in Brisbane are just a phone call away from helping you with your case. Make sure to contact the experts in the field who know the ins and outs of your situation.