Deed of Succession to Discretionary Trust

Our package includes:

• Letter
• Deed and
• Minutes

The Importance of a Deed of Succession

This deed allows succession to the appointor or guardian roles of a discretionary or family trust. Typically this is done in conjunction with estate planning and Wills assignments.

Planning succession to the role of appointor is a vital set that needs to be undertaken. The appointor holds the ultimate control over the trust as they can hire and fire the trustee. Unless succession is addressed, the trust’s assets may end up in the wrong hands.

Succession by Deed or by Will?

Succession to the role of appointor can occur via deed or via Will. However, succession by deed of succession is more effective than by Will. This is because:

• The estate of the deceased appointor may be subject to legal challenge, meaning the issue of who will succeed as appointor may be tied up in litigation for a number of years.
• A Will only operates from a person’s death. Thus, a deed of succession can cover the legal incapacity of an appointor during their lifetime as well as deal with succession upon their death.
• A Will may easily be revoked, such as upon remarriage or by a later Will.

A deed of succession is therefore generally much stronger than dealing with succession via a Will.

Often, trust deeds do not include adequate powers to cover succession. A deed of succession can be prepared by a lawyer to incorporate further powers and procedures if the current trust deed is lacking. Extra powers may be added to cover issues such as when a successor takes on the role of appointor, eg, on death, incapacity or bankruptcy. Care is needed when varying a trust deed and a lawyer in the relevant jurisdiction should be consulted to ensure that adverse taxation and stamp duty issues do not arise.