{"id":19566,"date":"2026-10-21T18:09:59","date_gmt":"2026-10-21T07:09:59","guid":{"rendered":"https:\/\/chuatan.com.au\/?p=19566"},"modified":"2026-10-21T18:25:35","modified_gmt":"2026-10-21T07:25:35","slug":"remove-trustee-change-appointor-family-trust-dispute","status":"publish","type":"post","link":"https:\/\/chuatan.com.au\/en\/remove-trustee-change-appointor-family-trust-dispute\/","title":{"rendered":"How to Remove a Trustee or Change the Appointor of a Family Trust"},"content":{"rendered":"\n<div class=\"ct-article\" data-no-translation>\n<p>A family trust often works smoothly while the founder is in charge. The father is the appointor, he and his wife are directors of the trustee company, and decisions are made at the dinner table. Problems arise when he dies or loses capacity, when the role passes to two siblings who do not get on, or when one child feels the trustee is favouring another branch of the family.<\/p>\n<p>For many Chinese and Asian families, it is more complicated when the appointor or a director lives in Hong Kong, Singapore, Malaysia or mainland China, or the deed has not been read in decades. This article explains, in general terms, how a trustee or appointor can be replaced in Australia when the family disagrees, and the costs and risks to consider.<\/p>\n\n<h2>Start with the chain of control<\/h2>\n<p>Before asking who can be removed, trace who controls what:<\/p>\n<ul>\n<li><strong>The appointor<\/strong> (sometimes called the principal or guardian) usually has power under the deed to remove and appoint the trustee.<\/li>\n<li><strong>The trustee<\/strong> is often a company, which holds the assets and makes the decisions.<\/li>\n<li><strong>The shareholders<\/strong> of the trustee company appoint and remove its directors under the company&#8217;s constitution and the Corporations Act 2001 (Cth).<\/li>\n<li><strong>The directors<\/strong> make the trustee&#8217;s decisions day to day.<\/li>\n<\/ul>\n<p>Changing the trustee and changing its directors are different steps, done by different people. Real control usually lies with the appointor or the shareholders of the trustee company.<\/p>\n\n<h2>Powers in the trust deed<\/h2>\n<p>Most family trust deeds give the appointor a power to remove the trustee and appoint a new one, usually by written deed or notice. The deed may also say:<\/p>\n<ul>\n<li>who succeeds the appointor on death or incapacity, for example the appointor&#8217;s legal personal representative or a named successor;<\/li>\n<li>whether joint appointors must act unanimously or by majority; and<\/li>\n<li>whether the appointor can nominate a successor in a Will.<\/li>\n<\/ul>\n<p>In Victoria, section 41 of the Trustee Act 1958 also provides a fallback power to appoint a new trustee in defined situations, such as where a trustee has died, wishes to retire, refuses or is unfit to act, or is incapable, with the power exercisable first by the person nominated in the trust instrument. Other states have similar provisions.<\/p>\n<p>The appointor&#8217;s power should be used for the purposes of the trust, not to punish a sibling. Using it in a dispute without advice can lead to litigation over whether the change was valid.<\/p>\n\n<h2>When the court can remove or appoint a trustee<\/h2>\n<p>If the deed does not provide a workable answer, the court can step in. In Victoria, section 48 of the Trustee Act 1958 allows the court to appoint a new trustee, in substitution for or in addition to an existing trustee, where it is expedient to do so and it would be difficult or impracticable without the court&#8217;s help. Every other state and territory has a comparable statutory power, and the Supreme Court also has an inherent jurisdiction to supervise trusts, including removing trustees.<\/p>\n<h3>What the court considers<\/h3>\n<p>The leading Australian authority is the High Court&#8217;s decision in <em>Miller v Cameron<\/em> (1936) 54 CLR 572. In broad terms, the court&#8217;s jurisdiction to remove a trustee is exercised with a view to the interests of the beneficiaries, the security of the trust property and the proper execution of the trust. The central question is whether the welfare of the beneficiaries is opposed to the trustee continuing in office.<\/p>\n<p>The jurisdiction is protective, not punitive. Misconduct or breach of trust is not essential, but removal needs proper justification, and the court will give weight to the settlor&#8217;s choice of trustee. Relevant matters can include:<\/p>\n<ul>\n<li>failure to account or keep proper records;<\/li>\n<li>failure to give genuine consideration to the beneficiaries, as in the Victorian Court of Appeal&#8217;s decision in <em>Owies v JJE Nominees Pty Ltd<\/em> [2022] VSCA 142, where the family trustee was replaced with an independent trustee;<\/li>\n<li>hostility between the trustee and the beneficiaries so serious that the trust cannot be properly administered; and<\/li>\n<li>a trustee who is bankrupt, incapable or, for a company, deregistered.<\/li>\n<\/ul>\n<p>Friction alone is usually not enough.<\/p>\n\n<h2>Deadlocked co-trustees and directors<\/h2>\n<p>Under the general law, private co-trustees must usually act unanimously unless the deed provides otherwise. Where two siblings are co-trustees, or the only two directors of the trustee company, and they cannot agree, the trust can become paralysed: distributions cannot be resolved by 30 June, properties cannot be sold, and bank accounts may be frozen.<\/p>\n<p>Options include using the appointor&#8217;s power, changing the directors through the shareholders, applying to the court for directions, or, in serious cases, asking the court to appoint an independent trustee.<\/p>\n\n<h2>Mediation before court<\/h2>\n<p>Court proceedings over a family trust are public, slow and expensive, and often harden positions. In mediation the family can agree on things a court cannot order: an independent director, a new decision process, a buy-out of one branch, or a plan to split the assets.<\/p>\n<p>The best time to plan for this is before any dispute. A well-drafted deed or family charter can set out the steps in advance: a family meeting, then a facilitator, then mediation, then expert determination, with court as the last resort.<\/p>\n\n<h2>Stamp duty and CGT on a change of trustee<\/h2>\n<p>Replacing a trustee usually means transferring legal title to the trust assets to the new trustee. In general terms:<\/p>\n<ul>\n<li><strong>Stamp duty.<\/strong> In Victoria, a transfer of dutiable property made solely because of a change of trustee is exempt under section 33(3) of the Duties Act 2000, if conditions are met, including that beneficial ownership does not change and the transfer is not part of a wider scheme. Other states offer relief on different and sometimes stricter conditions; in New South Wales, for example, concessional duty depends on the deed&#8217;s terms about whether the trustee can be a beneficiary. Check before any land is transferred.<\/li>\n<li><strong>CGT.<\/strong> A change of trustee made under the deed generally does not trigger CGT, because tax law treats the trustee as a continuing entity. A change of appointor under the deed generally does not either. The risk arises if the changes are so fundamental that the trust is treated as ending and a new trust arising, which can trigger CGT and duty.<\/li>\n<\/ul>\n<p>Obtain tax and duty advice before the change.<\/p>\n\n<h2>Practical steps<\/h2>\n<ol>\n<li>Obtain the original trust deed, all variations and the trustee company&#8217;s constitution and registers.<\/li>\n<li>Identify the current appointor, any successor, the directors and the shareholders.<\/li>\n<li>Check what the deed requires to remove or appoint a trustee, and any consents.<\/li>\n<li>Propose mediation early.<\/li>\n<li>Obtain duty and tax advice before transferring any assets.<\/li>\n<li>If agreement fails, take advice on a court application.<\/li>\n<\/ol>\n\n<h2>Frequently asked questions<\/h2>\n<h3>How do you remove a trustee of a family trust?<\/h3>\n<p>Usually the appointor removes and replaces the trustee under the deed, by written deed or notice. If the deed does not allow it, or the appointor will not act, a beneficiary or co-trustee can apply to the Supreme Court, which can remove a trustee where the beneficiaries&#8217; welfare requires it.<\/p>\n<h3>Can a beneficiary remove a trustee?<\/h3>\n<p>A beneficiary generally has no direct power to remove a trustee unless the deed gives one. But a beneficiary can ask the court to remove the trustee, and the court will consider whether the trustee continuing in office is against the beneficiaries&#8217; welfare.<\/p>\n<h3>Can the appointor of a family trust be changed?<\/h3>\n<p>Yes, if the deed allows it, for example through a nomination, a deed of variation or the deed&#8217;s succession clause. If the deed is silent or the parties disagree, changing the appointor can be difficult, and court involvement may be needed.<\/p>\n\n<h2>How Chua Tan Associates can help<\/h2>\n<p>Chua Tan Associates traces the chain of control in a family trust, from appointor to trustee company to shareholders and directors, and advises on how a trustee or appointor can be validly replaced. We prepare deeds of appointment and variation, act in Supreme Court applications for removal or directions, and help families build succession and dispute-resolution steps into their deeds. Justin Chua is a Nationally Accredited Mediator and Family Dispute Resolution Practitioner and an Accredited Family Business Advisor, and trained in accounting, so we can help siblings reach an agreement before court becomes necessary. We work alongside the family&#8217;s accountant and with local lawyers overseas, in English, Mandarin and Cantonese, and we recommend obtaining duty and tax advice from a qualified tax adviser working with your lawyer before any change.<\/p>\n<h2>Related reading<\/h2>\n<ul class=\"ct-related\"><li><a href=\"\/en\/trustee-duties-family-trust-distribution-resolution-30-june\/\">Trustee Duties in a Family Trust: Decisions That Stand Up<\/a><\/li><li><a href=\"\/en\/trust-protector-powers-consent-distribution-dispute\/\">Trust Protector Powers: When Protector and Trustee Disagree<\/a><\/li><li><a href=\"\/en\/who-controls-family-trust-after-death-mapping-control\/\">Who Controls a Family Trust After Death? Mapping Your Family Group<\/a><\/li><li><a href=\"\/en\/family-trust-divorce-australia-kennon-v-spry-trust-property-separation\/\">Family Trust Divorce Australia: Kennon v Spry and Trust Control<\/a><\/li><li><a href=\"\/en\/trustee-judicial-advice-court-directions-trust-dispute-mediation\/\">Trustee Judicial Advice, Court Directions and Trust Dispute Mediation<\/a><\/li><\/ul>\n<p><em>Chua Tan Associates acts for families, executors, trustees and their professional advisers in estate planning, estate administration and estate disputes in Australia and across borders. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an <a href=\"#ct-enquiry\">enquiry<\/a>. Advice is available in English, Mandarin and Cantonese.<\/em><\/p>\n<p class=\"ct-byline\"><em><a href=\"\/en\/justin-chua\/\">Justin Chua<\/a> (\u8521\u667a\u52cb), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal or tax advice.<\/em><\/p>\n<\/div>\n\n\n<div id=\"ct-enquiry\" class=\"ct-eq\" data-no-translation>\r\n<style>.ct-eq{background:#f4f1ea;border:1px solid #e3ddd0;border-radius:10px;padding:22px 24px;margin:32px 0;font-size:16px;line-height:1.6}.ct-eq h2,.ct-eq h3{margin:0 0 6px}.ct-eq p{margin:0 0 12px}.ct-eq form{display:grid;grid-template-columns:1fr 1fr;gap:12px}.ct-eq label{display:block;font-size:14px;font-weight:600;margin-bottom:4px}.ct-eq input,.ct-eq select,.ct-eq textarea{width:100%;box-sizing:border-box;padding:10px 12px;border:1px solid #cfc6b4;border-radius:6px;font-size:16px;background:#fff}.ct-eq .full{grid-column:1\/-1}.ct-eq button{background:#8a6a3b;color:#fff;border:0;border-radius:6px;padding:12px 22px;font-size:16px;cursor:pointer}.ct-eq .hp{position:absolute;left:-9999px}.ct-eq small{color:#5f5a50}.ct-eq .ok{background:#e7f3e8;border-left:4px solid #3c8d40;padding:12px 16px}.ct-eq .bad{background:#fbeaea;border-left:4px solid #b03a2e;padding:12px 16px}.ct-eq .ct-direct{display:flex;flex-wrap:wrap;gap:10px;margin-top:14px}.ct-eq .ct-direct a,.ct-eq .ct-direct button{background:#fff;color:#2b2b2b;border:1px solid #cfc6b4;padding:9px 14px;border-radius:6px;text-decoration:none;font-size:15px}@media(max-width:640px){.ct-eq form{grid-template-columns:1fr}}<\/style>\r\n<h3>Tell us about the estate<\/h3>\r\n<p>A short message is enough. 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[&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_yoast_wpseo_meta-robots-noindex":"","_wpcom_ai_launchpad_first_post":false,"_jetpack_hide_featured_image":false,"_jetpack_featured_image_duplicate_dismissed":0,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[25,106],"tags":[],"class_list":["post-19566","post","type-post","status-publish","format-standard","hentry","category-25","category-trusts"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.2 (Yoast SEO v28.7) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>How to Remove a Trustee or Change the Appointor of a Family Trust | Chua Tan Associates<\/title>\n<meta name=\"description\" content=\"Replacing a family trust&#039;s trustee or appointor when the family disagrees: powers in the deed, court 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