Changing company trustee's

Being a director is a role, not property that can fall into the hands of creditors – but the shares of the company can. So it may be a good idea to change trustees asap.

first thing to do is to review the deed. Find out who has the power to change trustees. Often it will be the appointor, sometimes it may be an appointor and a protector other trusts it may be the trustee.

The deed must be followed strictly. If the apppointor is required to give written notification to the trustee then this must happen. Non delivery may mean the change is invalid. Even if the appoinntor is Bob and Bob is the sole director of the company Bob should send a regitered letter to himself for proof.

Legal advice should be sought, especially on the stamp duty side. In NSW there is generally no stamp duty or just $50 but there may be full duty if changing trustee means a change in the beneficiaries of the trust. Wording of the deed is important.

Any mortgages over trust property will need to be released and new loans and mortgages entered into by the new trustee. Its a major event.

And a trustee has fiduciary duties, but so does an appointor. so specialist legal advice would be a good idea before changing anything, especially if bankruptcy is looming. A bankrupt person cannot act as director, so a new director should be sought and new shareholders conisdered – a trustee of another trust perhaps. Also read the deed about what happens to the position of appointor if the appointor becomes bankrupt. In my deeds the appointor is removed automatically.

I can’t remember what I wrote in that book now, but now that you mention it I may have covered changing trustees!