Queensland has recently passed new trust laws designed to solve the surprisingly common problem of what happens when the person managing a family trust loses capacity.
Many families use trusts to hold assets such as investments and property.
Currently, if a person is a sole trustee and becomes unable to act due to losing capacity, the trust could effectively become ‘stuck’.
Even where someone has been appointed to act under an Enduring Power of Attorney, the definition of ‘personal representative’ in legislation often prevents the attorney from appointing a ‘replacement’ trustee – meaning families sometimes need to apply to the Supreme Court just to keep everyday financial matters running.
The new Trusts Act 2025 aims to fix this gap.
Once commenced, an attorney acting under a valid Enduring Power of Attorney may be able to appoint a replacement trustee in certain situations where no other appointment mechanism exists.
In practical terms, this reform is intended to keep trusts operating smoothly during difficult times, reducing delays, stress and legal costs for families.
Hopefully, the small change will have a big effect in helping to ensure the trust’s financial arrangements can continue to function when they are needed most.
Trent Wakerley, director, Wakerley Legal, Level 3, Ocean Central, 2 Ocean Street, Maroochydore, 5443 9600, wakerleylegal.com.au
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