Tuesday, September 29, 2020

Trust structuring checklist - part II

View Legal Blog Trust structuring checklist - part II

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:
  1. Does the trustee effectively/practically control the trust in an unfettered way?
  2. Does the trustee exercise its powers independently or are they controlled or subject to approval by any other person/entity?
  3. Is the trustee a beneficiary of the trust?
  4. Can a beneficiary or a class of beneficiaries control the actions of the trustee?
  5. Can beneficiaries be removed or added, and if so by whom?
  6. Is there any risk that the trustee may be seen as simply the ‘alter ego’ of some other person?
  7. Does someone (e.g. an appointor, guardian, principal) have the power to unilaterally change the trustee?
** for the trainspotters, a classic song from Prince album ‘Hits (Vol. II)’, namely ‘Raspberry Beret’.