If an appointor in a discretionary trust gets sued, is the trust in danger?
The reason this might be dangerous is if the powers of the appointor are considered "property". If they are, then a trustee in bankruptcy, for example, could then possibly acquire, and then use, those powers to appoint a trustee that would make distributions to creditors, etc. Unfortunately, whether or not a trustee in bankruptcy could do this is still unclear.
However, even if they could do this (and it is unsure whether they could), an appointor is still expected to exercise their powers in accordance with their fiduciary duties (i.e., in the interests of all the beneficiaries).
At the end of the day, this is a technical legal issue that would require specific legal advice. Nonetheless, under our current deed, "the office of an Appointor will be vacated if that Appointor:
(a) becomes bankrupt or otherwise seeks relief under the laws pertaining to bankruptcy; or
(b) that Appointor is acting in the capacity of, or on behalf of, a trustee in bankruptcy, liquidator or administrator, or the Family Court Registrar"
This is designed to make the trust safer in case an appointor does get sued.
Also, having an independent appointor (such as a trusted family accountant or solicitor) can make the trust safer, too, since the deed requires that the decisions regarding appointment be made jointly (i.e., unanimously).