The Hidden Power of the Appointor—Are You in Control?
Many business owners and investors underestimate the power of the appointor in a trust. This role holds significant control over the trustee, and if not structured correctly, it could impact:
✔ Estate planning – Your will may not override the trust deed
✔ Asset protection – A poorly structured appointor could expose assets in family law disputes
✔ Control of your trust – The wrong appointor could put your assets at risk
In this quick video, Ross Millen explains why appointors matter and how to ensure your trust structure is secure.
Need expert advice? Contact Ross Millen or any of the Millens staff for a trust review today.
VIDEO TRANSCRIPT
Ross Millen:
I wanted to continue our little mini series on trusts. And today I wanted to focus on the person in the trust called the appointor or sometimes the guardian in old-fashioned trusts. But the appointor is the person that's got a lot and lot of power because they are the person that appoints the trustee. So if for some reason the trustee is not doing what the appointor wants, the appointor, subject to principles of equity and whatever, can remove that trustee and add a new trustee. So the appointor is a very important person.
Now, there's two key things about the appointor. Let's say that in estate planning, you want to provide who's going to be the appointor following your death. Now, you might put a whole lot of provisions in your will, but you still need to read the trust deed because the trust deed might say who's automatically the appointor so that your will won't operate. So any essential estate planning requires us to also read all of your trust deeds to make sure that whoever you want to be the appointor upon your death is someone that we can appoint under the trust deed, even if it may not be necessarily done in your will.
Another thing about the appointor is often we use trusts for asset protection, but in a matrimonial situation, what happens if you are the appointor, you are the trustee, you are the principal beneficiary? Well, the family court has very broad powers to look through all that and say, "Essentially, those assets in that trust belong to you." Because you are in complete control, you are the appointor, you're the trustee or the sole director of a corporate trustee, et cetera. So we're going to look through and say, "Those assets are yours, and they have to be brought into account for the purpose of doing a division of assets." So sometimes it's a good idea in those situations to have someone else as the appointor, not you. So you can say, "Hey, I'm not in control of those assets, someone else is. I can't automatically decide to make distributions or to share out the capital."
So remember, who is the appointor and how you change it is very important. If you've got any questions about your trust or setting up the appointor or changing it, remember to contact me, Ross Millen or anyone else at Millens, we'll be able to help you
