Individuals pose risks as trustees
Wednesday 25 February 2004
A recent court case highlights the dangers of not using a corporate trustee.
By The LandlordPeople setting up a trust should consider a corporate trustee rather than appointing individuals. The departure of a trustee through death or other reasons means the trust is likely to face – at best – the costs of changing over the title deed, says Bob Brown, of financial adviser firm Company Solutions.
"Often people appoint their lawyer or their accountant as a trustee and then they fall out, or change them for whatever reason," he says.
"If a trust owns several properties and you change the trustees, you have to change the title deeds and the costs can run into several thousand dollars."
The alternative to this is to set up a company, which then acts as the trustee, and directors are appointed to that company who would otherwise be appointed as trustees.
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