MCW Trust Series – Can the trustee delegate their powers?

Private Client

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DATE PUBLISHED: February 10, 2025

mCW Trust Series


The Trusts Bill 2024 (Qld) (Proposed Bill), introduced into the Queensland Parliament on 21 May 2024, aimed to modernise and simplify the existing Trusts Act 1973 (Qld) (Existing Act). The Proposed Bill lapsed upon the dissolution of the Queensland Parliament on 1 October 2024. This means that the Existing Act remains in effect until the Proposed Bill is re-introduced into Parliament, has been passed and receives royal assent. We consider it likely that the Queensland Parliament will re-introduce the Proposed Bill and take steps to achieve its goal of modernising and simplifying the Existing Act.

To address these potential changes and common questions regarding trusts, the McInnes Wilson Lawyers (MCW) Tax and Private Advisory Services team has created the MCW Trust Series, covering:

  1. Who can be appointed as a trustee of a trust?
  2. How are trustees removed and appointed?
  3. What are the powers of the trustee?
  4. Can the trustee delegate their powers?
  5. What are the duties of the trustee?
  6. What are the rights and obligations of beneficiaries of a trust?
  7. When does a trust become a foreign trust?

This article explores the fourth of seven topics: Can the trustee delegate their powers? Future articles will delve into the remaining topics available at the links above.

We note that the MCW Trust Series considers the trusts legislation in Queensland. If you have questions about trust legislation outside Queensland, please contact us for tailored advice.

key takeaways

  • It is necessary to review the trust deed and the applicable Trusts Act to determine whether the trustee can delegate their powers and the process for doing so.
  • The Trusts Act 1973 (Qld) allows the trustee to appoint an agent and to delegate their powers where they will be outside of Queensland or physically unable to act as trustee.
  • The Trusts Bill 2024 (Qld) maintains the powers set out in the Trusts Act 1973 (Qld) and further clarifies how and when these powers can operate.
  • The Trusts Bill 2024 (Qld) also allows the trustee to delegate its investment powers to another person in the circumstances the trustee considers appropriate.

What is a trustee?

The trustee of a trust is a person or company appointed to manage the day-to-day operations of a trust. This includes managing assets, engaging professional advisors (e.g. financial advisors, accountants or lawyers), and distributing income or capital from the trust to beneficiaries.

rules governing trusts

Broadly, in Queensland, trusts are governed by: 

  1. the trust deed; and
  2. the Existing Act (or potentially the Proposed Bill).

In order to determine who can be the trustee of a trust, it is necessary to consider both the trust deed and the Existing Act.

trust deed - Can the Trustee delegate their powers?

The trust deed will record the establishment of the trust and will generally set out the rules, powers of the trustee, and the rights of any beneficiaries of the trust.

The trust deed may specify whether the trustee can delegate their powers to another person and outline any terms and requirements for doing so. It is important that trustees review the terms of the trust deed to ensure any delegation of power is consistent with the trust deed.

Where the trust deed does not include a power to delegate, the trustee may, if a sufficient variation power exists, decide to vary the trust deed to include this power.

Trustees should also review the requirements set out in the applicable trust legislation (e.g. in Queensland, the Existing Act) to ensure any delegation of powers does not contravene the law.

Existing Act and Proposed Bill – Can the Trustee delegate their powers?

The Existing Act applies to all trusts governed by Queensland law, outlining a range of powers, obligations and entitlements of parties connected to a trust.

The Proposed Bill confirms its application to all trusts governed by Queensland law, regardless of whether the trusts were established before or after its commencement. It also overrules any conflicting provision in the trust deed (unless explicitly permitted by the Proposed Bill.

We outline the relevant provisions of both the Proposed Bill and Existing Act below.

existing act

The Existing Act allows a trustee who is about to leave Queensland or who will be temporarily physically unable to act as trustee to delegate their powers, authorities and discretion to any person in Queensland. The delegation must be done by a power of attorney.

The delegation is effective only while the trustee is outside Queensland or is physically incapable of acting as trustee, and is revoked when the trustee returns or regains capacity to perform its duties as trustee. However, the trustee remains liable for any actions taken by their delegate. This power of delegation can be useful where the trustee satisfies the circumstances discussed above.

Additionally, the Existing Act also allows the trustee to:

  1. employ and pay agents to transact any business or perform acts required in the execution of the trust; and
  2. appoint an agent or attorney to deal with real or personal property located outside of Queensland.

The Existing Act does not limit who can be appointed as an agent or attorney.

However, the Existing Act does not specifically allow the trustee to delegate their investment powers to another person.

proposed bill

The Proposed Bill also adopts the delegation power in the Existing Act and provides further clarification on how these powers operate:

  1. A delegate must meet the eligibility criteria to be appointed as a trustee (see our article on who can be appointed as a trustee here).
  2. The trustee and delegate must execute a document confirming the delegation of powers and the circumstances in which the delegation operates.
  3. The trustee must notify any co-trustees and appointors of the trust of the delegation.
  4. Delegation commences in the circumstances set out in the document confirming the delegation or on the date that document is signed (where the document does not confirm an event or day for the commencement of the power).
  5. Delegation is limited to 12 months, unless revoked earlier due to specified circumstances, such as resignation, disqualification, or death of the trustee or delegate.

The Proposed Bill also allows the trustee to:

  1. appoint agents to do anything required to be done in the administration of the trust, provided the agent is not a beneficiary (unless already appointed before the Proposed Bill takes effect); and
  2. delegate investment powers to another person, provided the trust deed does not prohibit this. Trustees remain liable for the delegate’s actions unless the trust deed specifies otherwise.

duties of the trustee

When deciding whether to delegate powers, trustees must consider their duties and responsibilities.

Our next article in the MCW Trusts Series explores the duties and responsibilities of a trustee and the proposed changes under the Proposed Bill.

conclusion

It is necessary to review the terms of the trust deed and the relevant trusts legislation to determine whether a trustee can delegate their powers.

Both the Existing Act and Proposed Bill allow trustees to appoint agents and delegate powers in limited circumstances, such as when the trustee is outside of Queensland or physically unable to act as trustee. These powers are relatively narrow in their scope.

The Proposed Bill also permits trustees to delegate investment powers, provided this is consistent with the trust deed.

Where the trustee delegates its powers, it remains responsible for any acts or omissions of the delegate.

how can mcw help?

Contact Emily Ryan or Kimberley Barnes from our Tax and Private Advisory Services team if you would like to discuss who can be appointed as a trustee of a trust, or if you would like to discuss trusts generally. 

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