Appointing a Corporate Trustee in a Family Trust


In setting up a family trust or other trust structure, a person known as the ‘settlor’ appoints an individual or a company as the trustee, which can be used as a mechanism for control, asset protection, and tax minimisation.


Company as Trustee for a Family Trust


In a broad sense, the trustee is the ‘brains’ of the trust and is central to functions of control.

Individuals are often appointed as a trustee to minimise the procedural aspect and ‘save costs’ on a short-term basis while establishing a protection mechanism.

Although there are many benefits of appointing an individual as the trustee, the appointment of a corporate trustee provides an additional layer of protection that an individual in their capacity as trustee cannot provide.

A corporate trustee is a proprietary limited company appointed as the trustee, and, as its own separate legal entity, controls the trust.

As the trustee is personally liable for the trust’s liabilities, it is common for the trustee appointed to be a shell corporation with no, or minimal, assets.


Why Appoint a Corporate Trustee in a Family Trust?


Corporate trustees have many benefits, such as limited liability and easy succession, when appointed as trustees in discretionary (family) trusts.


Corporate Trustees have Limited Liability


Companies have the benefit of limited liability.

Consequently, if a corporate trustee suffers any liability, the individual directors will not suffer personal liability (other than in exceptional circumstances).

Conversely, an individual who acts as trustee exposes their personal assets if they incur any liability as trustee of a trust


Succession Made Easy (Easier)


The only guarantee in life is passing away.

Appointing a corporate trustee provides for easy (easier) succession as a corporate trustee does not cease upon the passing of one of its directors.

When an individual is appointed as trustee and they pass away (in particular if they are the only remaining trustee), this may cause difficulties with regard to the administration of the trust. 


Contact Us


For more information about asset protection and appointing a corporate trustee in a family trust, contact us at Bambrick Legal today. We offer a free, no-obligation 15-min consultation for all enquiries.

Read more about our Business and Commercial services here.

Related Blog – What is a Testamentary Trust?

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