corporate Trustee

The appointor's role is just to appoint the trustee. It is the trustee that is the legal owner of the trust assets and therefore the trustee that must sign legal documents. Since a company can't sign the directors of the company are authorised to sign on its behalf.

There is case law determining that the position of appointor is not 'property' and so cannot be taken by a trustee in bankrupcty (say husband is sued the bankruptcy trustee couldn't step in his shoes and take over the role of appointor and then appoint themselves as trustee and distribute all the trust assets to themselves). But some people recommend having a third party appointor too so as to distance themselves from the argument that they are the trust, ie controller. But this is dangerous as the third party could act in their own interests.

Hi S

Your accountant is venturing into legal advice there!

Appointors can certainly be sued. But the position of appointor is not something that can be taken by someone else such as a bankruptcy trustee. So no one else should be able to get their hands on your appointorship. But there are cases, one involving a Corporations Act offences and many Family law matters where they have attacked trusts and looked behind them to the controller, so it is still a remote possibilty that someone can get at trust assets. Also any money you lend the trust or it owes you could be gotten at too.

I personally can only see double the risk in adding a second director. It is not needed, a single director is possible. But it may be recommended where control of the company is important. But it is usually the shareholders who control the appointment of directors and with a trust involved it is the appointor that can remove the trustee. Also with husband and wife there is less chance of disputes arising – such as should 'we' buy a certain property – the director could sign and the contract binding.

But the risk is mainly in the guarantees. Banks will want all directors to guarantee the loan, so if the venture fails it would be better to have one person go down than both.