7. Trustees: Appointment, Removal and Retirement

Question 1

Trust Corporations

Answer 1

Corporate trustees that carry out trust business for profit

Question 2

Minimum requirement of human trustees / trust corporations for trysts over land

Answer 2

2 (or 1 TC)

Question 3

Minimum numbers of trustees for trusts over personalty

Answer 3

1

Question 4

Maximum # of trustees for trusts over land

Answer 4

4

Question 5

Three ways a trustee can retire

Answer 5

1. By powers given expressly in the trust instrument
2. by s 39 TA 1925: retire without replaced
3. by s 36 TA 1925: retire with replacement

Question 6

Conditions for a trustee to retire without being replaced

Answer 6

1. Either express provision to this effect in trust deed or
2. s 39 TA

a. there will be two trustees or a TC left
b. trustee retires by deed
c. other trustees consent by deed

Question 7

Conditions for a trustee to retire with replacement under s 36 TA 1925

Answer 7

1. New trustee appointed by person nominated in trust instrument (or if non, the continuing trustee(s))
2. Appointment must be in writing (ideally a deed)

Question 8

Is a trustee who has retired liable for breaches of trust

Answer 8

A retiring trustee remains liable for their own breaches but will not be liable for future
breaches unless they retired to facilitate the breaches.

Question 9

4 Methods of Removing Trustees

Answer 9

1. Trust instrument provisions
2. s 36(1) TA 1925: grounds for replacing a trustee
3. s 41 TA: when court will replace a trustee
4. s 19 TLATA: when beneficiaries can remove a trustee

Question 10

Grounds for replacing a trustee (by fellow trustees)

Answer 10

s 36 TA 1925:

(a) the trustee is dead
(b) remains outside the UK for more than 12 months
(c) desires to be discharged (retire)
(d) refuses to act (disclaims)
(e) is unfit to act
(f) is incapable of acting (eg mental or physical incapacity)
(g) is a minor.

Question 11

When will the court replace a trustee?

Answer 11

1. If it is expedient to do so and otherwise inexpedient / difficult to do without the court’s help
2. must be initiated by an application by trustees or beneficiaries
3. Court will only replace if this is in the bEST INTERESTS of the trust

Question 12

When does s 19 TLATA 1996 Not apply? What is the significance of this?

Answer 12

1. If it is excluded in trust instrument or the trust instrument nominates someone to appoint new trustees
2. This is the power of the beneficiaries to serve written directions on a trustee to retire and appoint someone else

Question 13

Which beneficiaries can make a written direction under s 19 TLATA

Answer 13

All must be of full age and capacity and (taken together) are absolutely entitled to the trust property

Question 14

If a trustee is served written direction to retire under s 19 TLATA - under what conditions must they obey and retire by deed?

Answer 14

1. Reasonable arrangements have been made to protect their rights
2. leaving atleast 2 trustees or 1 trust corp
3. EITHER someone is appointed to replace them or continuing trustees consent by deed to their retirement

Question 15

Who can appoint additional trustees?

Answer 15

1. The testor in the trust instrument
2. the trustees or person nominated in trust instrument
3. The court
4. the beneficiaries

Question 16

Maximum delegation of a trustee to their attorney?

Answer 16

12 months

Question 17

Notice requirements when appointing an attorney (deputy)

Answer 17

1. written notice to all other trustees and ANYONE ELSE with the power to appoint new trustees within 7 days of delegation

Question 18

Liability of a trustee for the acts of their attorney?

Answer 18

The delegating trustee will be automatically liable for the acts or defaults of the attorney as if they were the acts or defaults of the trustee.