I want to change a trustee of trust – that’s easy, right?
Recently we encountered a situation in which some time ago, people with a Family Trust had tried to remove a trustee themselves simply by signing a resolution to that effect.
Years later when they sold the property owned by the Trust they needed to track down the trustee, who had moved overseas years before, because of course he was on the property title as the owner. The former trustee had to sign the transfer documents for the sale to go ahead. They hadn’t considered the fact that the trustee’s name would still be on the title to the property.
It is inevitable that most people with family trusts will need to change one or more trustees of their trusts at some point. We have found that there is a common perception that this simply involves signing a form. Unfortunately it is not that simple, especially where the Trust owns a property subject to a mortgage.
Generally changing a trustee is a three step process:
- If there is a mortgage on the property, it will be necessary to contact your Bank to see how they want to deal with the change of trustee in relation to your mortgage. The names on the title to the property generally have to match those on the mortgage, so if the owners of the property, i.e. the trustees of the trust, change, then they will need their documents to align with that;
- The current trustee, your new trustee/s and your old trustee need to sign a document which retires the old trustee and appoints the new one;
- The new trustee needs to be registered as an owner on the title to the property. You need to sign forms authorising us to register the new names on the title and we then proceed with registration.
The process is not a difficult one, but can be time consuming, so if you are planning to change a trustee, bear in mind that it will not be immediate. We can help to guide you through the process to ensure that any change is done properly, to minimise future delay, inconvenience and cost.
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Contact Rainey Collins
163-171 Featherston Street
PO Box 689, Wellington 6140
Phone: 04 473 6850
Fax: 04 473 9304