Appointment, Removal, and Retirement of Trustees Flashcards
who can be appointed as trustee?
anyone with sound mind
not a minor
is there a maximum or minimum amount of trustees that must be appointed?
no
except for trusts of land = max 4 and min 2 or one trust corporation
but the less trustees there are the less administrative difficulties there will be as trustees must act unanimously
does an appointed person have to act as trustee?
no - they can refuse
if a trustee has to be appointed during the trust, how are they going to be appointed? (4 cases)
settlor has no automatic right to appoint a new trustee
(1) trust instrument may give express power to someone to appoint a new trustee (e.g., settlor)
(2) statute gives trustees or the PR of the last trustee to die the power to appoint a new trustee where a trustee dies, an appointed T is abroad for 1 year, lacks capacity, a trustee wants to retire, refuses to act, or is unfit to act.
(3) adult beneficiaries with SV rights have the power to direct trustees to appoint a new trustee only if they all consent - but not when the trust instrument provides someone with the power to appoint trustees
(4) the court can appoint trustees - but must consider wishes of trustees, and not where Bs are disputing
who can remove trustees from office? (4)
(1) trust instrument can deal with removal and give powers of removal
(2) trustees or PR of last trustee to die has statutory powers to remove a trustee when it is necessary to replace them
(3) court has power to remove trustees
(4) beneficiaries with SV rights can unanimously agree to direct to remove a trustee from office (ONLY IF 2 TRUSTEES OR A TRUST CORPORATION REMAINING)
what are the powers of a beneficiary to appoint or remove a trustee? what are the limits to their powers?
only adult beneficiaries with SV rights if they all agree have the power to direct trustees to appoint or remove a trustee from office
requirements:
- must be in writing
- all Bs must have SV rights, be adults, and unanimously agree
- can only be exercised to remove trustees if there are 2 trustees or a trust corporation remaining
otherwise, they can exercise their SV rights to collapse the trust, have legal title transferred to them and create a new trust with different trustees
what are the limitations on the court when appointing or removing trustees? (4)
- must consider wishes of existing trustees
- cannot do so where there is a dispute between beneficiaries
- must consider whether appointment / removal will promote or impede the trust administration
- must consider views of existing beneficiaries and whether they are reasonable
how can a trustee retire from office voluntarily? what are the requirements? (4)
(1) by deed
(2) only where there are at least 2 trustees or 1 trust corporation remaining to act after they retire
(3) all other trustees and anyone with a power to appoint trustees consents
(4) must obtain a formal discharge of liabilities from all beneficiaries
