Appointment of Trustees Flashcards
Which of the following statements about the number of trustees in a trust of land is correct?
A. Only one trustee is ever permitted
B. There must be at least three trustees
C. There is no maximum number of trustees
D. A maximum of four trustees can hold legal title
D. A maximum of four trustees can hold legal title
Explanation: Under the Trustee Act 1925 and TLATA, while more trustees can be appointed, only four can hold legal title to land at any one time.
A settlor creates a lifetime trust transferring assets to two named trustees. One trustee refuses to accept the appointment. The trust deed contains no express power of appointment. What is the most appropriate next step?
A. Apply directly to the Public Trustee
B. Rely on s19 TLATA
C. No trustee can be appointed without court intervention
D. Use s36 Trustee Act 1925 to appoint a new trustee
D. Use s36 Trustee Act 1925 to appoint a new trustee
Explanation: Where a trustee refuses the role and there is no express appointment clause, section 36 TA 1925 allows for a new trustee to be appointed.
Who cannot legally act as a trustee?
A. A beneficiary under the trust
B. A professional advisor
C. An individual aged 25 with full mental capacity
D. A bankrupt individual
D. A bankrupt individual
Explanation: Bankrupt individuals are usually disqualified due to concerns about asset control. Minors are also disqualified.
A will creates a trust but does not appoint trustees. The personal representatives are willing to act. What is the correct procedure for holding trust property?
A. PRs must transfer the legal title to themselves in their capacity as trustees
B. PRs automatically act as trustees without further action
C. The will is invalid without named trustees
D. The property must be held on resulting trust
A. PRs must transfer the legal title to themselves in their capacity as trustees
Explanation: In testamentary trusts, if trustees are not named, the PRs must hold and then transfer the trust property to themselves (or others) as trustees.
When can beneficiaries with full entitlement use section 19 TLATA to appoint or remove trustees?
A. If there is no contrary intention in the trust and all beneficiaries are of full age and capacity
B. Only if there are two or fewer trustees
C. When the trust deed permits removal by majority decision
D. Only if the trust is under 10 years old
A. If there is no contrary intention in the trust and all beneficiaries are of full age and capacity
Explanation: Section 19 TLATA allows fully entitled adult beneficiaries to direct the appointment or removal of trustees if no contrary intention appears in the trust instrument.
A minor is left a legacy under a will. The will is silent on trustees. What is the most appropriate step for the PRs?
A. Pay the legacy into a court account under s63 Trustee Act 1925
B. Hold the asset themselves until the minor reaches 16
C. Pay the legacy to the parent automatically
D. Ignore the legacy until the minor turns 18
A. Pay the legacy into a court account under s63 Trustee Act 1925
Explanation: If no suitable trustee is available, PRs may pay the legacy into court until the minor reaches majority, ensuring protection and compliance.
Which section allows a court to appoint a trustee where it is expedient to do so and no other mechanism exists?
A. Section 27 Trustee Act 1925
B. Section 41 Trustee Act 1925
C. Section 36 Trustee Act 1925
D. Section 42 Administration of Estates Act 1925
B. Section 41 Trustee Act 1925
Explanation: Section 41 allows the court to step in and appoint a new trustee when it is expedient and no other appointment power is available.
Which of the following is true about appointing trustees for a minor’s inheritance under a will?
A. Only PRs can act as trustees
B. The Public Trustee must always be appointed
C. Trustees must be appointed under section 42 AEA 1925
D. The minor can act as trustee from age 16
C. Trustees must be appointed under section 42 AEA 1925
Explanation: Section 42 of the Administration of Estates Act 1925 allows for the appointment of two to four trustees to hold a minor’s inheritance until they reach 18.
Which of the following is a formal requirement for the appointment of a new trustee?
A. The consent of the beneficiaries
B. Execution of the appointment as a deed
C. Approval from the probate registry
D. Registration with the Charity Commission
B. Execution of the appointment as a deed
Explanation: Under the Trustee Act 1925, appointments of new trustees must be made in writing and executed as a deed. This applies whether trustees are appointed under an express power or under the statutory powers.
A trust instrument appoints three trustees and reserves power to appoint new trustees to Sarah. One trustee retires. Sarah now wishes to appoint a replacement. Which of the following is correct?
A. Sarah must seek court approval before appointing a new trustee
B. Sarah cannot appoint anyone as all appointments must be made by the remaining trustees
C. Sarah can exercise the reserved power and appoint a new trustee by deed
D. Sarah can only appoint a new trustee if all beneficiaries consent
C. Sarah can exercise the reserved power and appoint a new trustee by deed
Explanation: Where a power to appoint new trustees is expressly reserved in the trust instrument, the named individual can appoint a new trustee by deed without needing beneficiary consent or court involvement.
Which of the following statements about the Public Trustee is correct?
A. The Public Trustee can only act where there is more than one trustee
B. The Public Trustee must be appointed by a will
C. The Public Trustee may act where no other suitable trustee is willing or able
D. The Public Trustee can act as a private executor for any estate
C. The Public Trustee may act where no other suitable trustee is willing or able
Explanation: The Public Trustee exists as a statutory safeguard to step in where no private individual is willing or able to act, particularly in small trusts or complex situations. Their role is governed by the Public Trustee Act 1906.
A trustee disclaims their appointment before accepting the role. What is the effect?
A. They remain legally liable for trust administration until a replacement is appointed
B. The disclaimer has no effect unless authorised by the court
C. They are treated as if they were never appointed
D. They must still sign a renunciation deed
C. They are treated as if they were never appointed
Explanation: If a trustee disclaims their appointment before acting (i.e. before intermeddling or accepting), they are treated as if they were never appointed. No duties or liabilities arise, and the role may pass to others via the express or statutory provisions.
