The assets owned by trusts do not form part of your estate and are not dealt with under your Will. You can’t use your Will to gift assets in the family trust to your loved ones.

The trust continues after you or any of the other beneficiaries die, and the assets will continue to be owned by the trust.

Think of it like this – even though the assets in the trust may look and feel like your property, the trust is its own entity. It continues on if you die or lose capacity.

When a person who controls the trust dies or loses capacity then that control role becomes vacant.

The trust deed will set out how control can be passed. Despite common expectations, the most important role in a trust is not the trustee but the appointor (sometimes known as the protector, guardian or principal). Generally, the appointor has power to appoint and remove the trustee. For estate planning purposes it is crucial to ensure that an appropriate person becomes the appointor of the trust on the current appointor’s death. The appointor can appoint a new trustee and therefore has ultimate control of the trust.

It’s essential to make sure that an appropriate person fills the vacancy as controller of the trust. Exactly how to do this will depend on the terms of your trust.

It’s important that you obtain legal advice and make a succession plan for your trust. Even if your trust does have a plan in place, it may not be the best plan for your circumstances. Trusts can run for a very long time, typically 80 years, so the best plan for when the trust was established may not be the best plan for now. You may need to vary your trust deed to ensure that control of the trust passes to the appropriate person. For tailored advice on family trust succession, contact us for an estate planning consultation.