6. Appointment, Retirement, and Removal of Trustees Flashcards
What is the minimum number of trustees?
One, but if trust property is land at least two trustees or a trust corporation is required to give valid receipt for capital money arising on the sale of land
What is the maximum number of trustees for (1) a trust of land and (2) a trust of all other property?
Land: Maximum of four
Other property: No maximum
Once the trust is created, does the settlor retain power to appoint new trustees?
Not unless there is express provision in the trust instrument
What therefore applies in the absence of express provision in the trust instrument?
Statutory rules on appointment, retirement, or removal of trustees
Who has the power to appoint additional trustees?
All trustees, unless one is designated to have this power
Even where the trust is not land, what is the number of trustees which a trust must not exceed specifically through the trustees’ power to appoint new trustees?
Four.
If a trust already has four trustees, this power will therefore not be available.
What four parties have the power to appoint replacement trustees, and in what order of priority?
- Person named in the trust instrument, or if silent:
- Surviving/continuing trustees, or if none:
- Personal representative of the last surviving trustee, or if none
- The court
Must whatever party is appointing the replacement trustee replace all outgoing trustees?
No, but they can if they want
Other than where they are dead, what is the exception to the rule that a retiring trustee should be a party to an appointment by trustees?
Where the trustee has been removed against their will
Must the appointment of a replacement be in writing?
Yes, but it does not have to be made by deed
Even though a deed is not necessary, why is it usually used?
Because it will vest legal title to the trust property in the new trustee
Although beneficiaries generally have no power to control the trustees unless there has been a breach, they can select trustees if what three conditions are met?
- No person is nominated in the trust instrument to have this power
- The criteria of the rule in Saunders v Vautier are met (sound age and mind, together they are absolutely entitled), and
- Beneficiaries act unanimously
Where these criteria are satisfied, what can the beneficiaries do, and why when the general rule is that they cannot?
In writing, order one or more of the existing trustees to retire and order the remaining trustees to appoint a trustee/trustees of the beneficiaries’ choosing.
They can do this because the rule in Saunders v Vautier is satisfied, so they could elect to shut down the trust and take the property anyway if they wanted.
What is the effect of one beneficiary’s interest being contingent?
Then all beneficiaries are not absolutely entitled to the trust property, and as such neither the rule in Saunders v Vautier nor the extension allowing them to remove a trustee applies
