Important Trustee Clarification

Important Trustee Clarification

Dawson v Dawson [2019] NSWSC 82 confirms several matters that have always seemed self- evident but it’s always great to have a case law example as well.

The case confirmed that;

  1. When a trustee is appointed pursuant to an enduring power of attorney they are personally appointed. They do not represent the appointor. They act independently in place of them.
  2. Unless the deed, or constitution of the corporate trustee, states otherwise, that appointment continues after death of the grantor of the enduring power of attorney.
  3. Where there are only two trustees, or two directors of a corporate trustee, unless the deed or constitution of the corporate trustee states otherwise, trustee decisions must be unanimous if material changes are proposed.

Each of these factors are important when considering possible blended family dispute scenarios.

Where the deceased’s wishes may be contrary to the surviving trustee’s intent, I have generally considered that appointing a trustee under an EPOA can be a valuable precautionary measure, particularly if the appointee will also be the member’s benefit guardian or, even better, executor of the member’s estate. Conversely, such an appointment can cause problems where the appointee feels aggrieved by the deceased’s intent.

In this case the son of the deceased’s previous wife was appointed under his dad’s EPOA. The other trustee was his dad’s second wife. The executor of the estate was her son. Sometime after Dad’s death the wife appointed her son as the replacement trustee on the basis that her stepson’s appointment ceased on the finalisation of the EPOA when his dad died. The court held that the original appointment stood and that the subsequent appointment of her son was not valid as it would have required the agreement of both existing trustees.