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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 23072
Experience:  38 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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We spent around $5000 some months ago to form a family trust

Customer Question

We spent around $5000 some months ago to form a family trust with the goal of asset protection. At the time, the lawyer assumed that we wanted to add our one investment property to the Trust and since we were novices in the field, did not know any better and did not object. Consequently, a Family trust was created with myself, my husband and the law firm as trustees. The trust owns our family home and one investment property. Some time later, we acquired a second investment property and has then educated ourselves to form a LTC that owns the investment property. The situation presented itself that the bank required security over our first investment property to approve lending for the second property and we therefore had to request the signatures of the law firm's partners as Trustees of the Family Trust. Since we have not been entirely happy with the handling and manner of the lawyer from the first firm where the Family Trust was formed, we made use of another lawyer to handle the purchase of the second investment property by the LTC. The first lawyer found out about this, since we had to approach her for the signatures of the partners of the law firm since it was the third trustee as said earlier. Since we have started to make use of another lawyer, she has taken offence and the situation has become rather messy to the extent where she is pressuring us to have the new lawyer prepared a deed of retirement of trustees etc to remove her company as trustee. Although we do not object to this, we feel upset that we have to now spend another substantial amount of legal fees to have a new trustee appointed etc. and that it feels that it is not our choice anymore as to the third trustee, but that we are being pressured at this moment to make the changes involving more fees. The question is weather we have breached practice to take our legal work to another firm while we have one firm acting as trustees for our family trust? Is this lawyer in the right to pressure us to have this change made while it may not be the best time for us financially and we have paid a large some in legal fees initially?
Submitted: 1 year ago.
Category: New Zealand Law
Expert:  Chris The Lawyer replied 1 year ago.

You have an absolute right to change lawyers and they cannot stop you. But they do have a choice about remaining as the independent trustee and if they no longer want to act, they can retire. It is important to have the this third trustee so you will need to replace them. But it's not difficult to do this and change the name on your titles to the property although as you realise there will be some expense. The cost should be born by the firm as to retirement as it is their choice but the replacement will be your cost. You should tell them as it is their choice to retire you want them to pay their part of the costs themselves and you will pay for the appointment of the new trustee