The post last week mentioned seven key issues that should generally be considered whenever establishing or amending a discretionary trust deed.
Set out below are an additional seven issues that should generally be taken into account:
- Does the trustee effectively/practically control the trust in an unfettered way?
- Does the trustee exercise its powers independently or are they controlled or subject to approval by any other person/entity?
- Is the trustee a beneficiary of the trust?
- Can a beneficiary or a class of beneficiaries control the actions of the trustee?
- Can beneficiaries be removed or added, and if so by whom?
- Is there any risk that the trustee may be seen as simply the ‘alter ego’ of some other person?
- Does someone (e.g. an appointor, guardian, principal) have the power to unilaterally change the trustee?