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Dealing with conflicts between trustees

By Tara Hurley - 15 Nov 2012

Trusts are often set up to protect family assets and are administered by the family members themselves. While such trusts may have lower administration costs than those involving professional trustees, they are at higher risk of being impaired by disputes between trustees.

Trust property must be dealt with in a way that promotes the welfare of the beneficiaries. If conflicts arise between trustees their ability to deal with trust property may be inhibited. This may have a negative impact on the beneficiaries. 

Such a situation may arise if the trustees are spouses or siblings and the relationship between them breaks down.

The High Court has a reserve power to remove a trustee (or trustees) in such a situation. A key element is whether the actions of, or dispute between, the trustees has had a negative impact on the welfare of the beneficiaries. If this can be shown it is likely the Court will exercise its power of removal, so that trust property can be properly administered.

If a dispute between trustees arises, the key is to take advice quickly so that the dispute can be resolved in the most efficient manner possible.

Contacts

Tara Hurley

 

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