Appointment, Removal and Retirement of Trustees Flashcards
when can a trustee retire, be appointed or removed?
if there is provision in the trust. Otherwise, by the statutory powers
which individuals can be trustees?
- Individuals who are adults with mental capacity
which companies can be trustees?
- Companies if permitted by their constitution
what is a trust corporation?
- Trust corporations (TC) this is a company which carries out trust business / acts as a corporate T for profit
what is the min and max number of trustees over land?
min - 2 human Ts or 1 TC
max - 4
what is the min and max number of trustees over personalty?
min - 1
max - none
but it is best practice to have between 2 – 4 Ts because an express trust can be a mix of land and personalty
when can a trustee retire without a replacement?
(S39 TA 1925)
T can retire without being replaced if the following conditions are met:
o There will be two human Ts or one TC left;
o T retires by deed; and
o The other Ts consent by deed
If the above cannot be satisfied, T can only retire with a replacement (s36(1))
when can a trustee be replaced?
(S36(1) TA 1925)
This can be relied on the replace a T in the following circumstances:
o T has died
o T has been outside the UK for more than 12 months
o T wants to be discharged/retire
o T refused to act/disclaims
o T is unfit to act
o T is incapable of acting (i.e. mental capacity)
o T is a minor
when a new trustee is being replaced, how is the new T appointed?
The new T is appointed by either:
o The person specified in the trust. If there is not one;
o The Ts (inc. retiring T if they are willing); or
o If all Ts have died, the PRs of the last surviving T
The appointment must be in writing (deed is advantageous)
why is a deed advantageous?
o A deed is advantageous because it automatically vests the TP (apart from company shares) in the new T
what is a trustee’s liability when they are replaced?
T remains liable for their own breaches but not future breaches, unless they retired to facilitate the breaches
what powers do Bs have?
(S19 TLATA 1996)
* Bs can retire and appoint a Ts by serving a written direction on them
what happens if a trustee dies?
- 2 or more Ts hold the trust property as JTs, so if 1 dies legal title devolves to the other Ts
- If there is one T left, they should appoint a new T under s36(1)
re: direction by Bs
when can Bs exercise this power?
- Bs must all be 18, have capacity and taken together are absolutely entitled
re: direction by Bs
when a notice has been served, when shall T retire and how?
T shall retire by deed where:
o Reasonable arrangements have been made to protect retiring’s T’s rights;
o There will be at least 2 Ts or a 1 TC after retirement;
o Another person is appointed to replace them or the remaining Ts consent by deed
re: direction by Bs
when can Bs not use this power?
Bs cannot rely on s19 if:
o The trust excludes it; or
o The trust nominated someone to appoint new Ts
who can appoint a T? How must this take place?
A T can be appointed by either:
o The person specified in the trust. If there is not one;
o The current Ts
There cannot be more than 4 Ts
The appointment must be in writing (deed is advantageous)
who can apply to the court and for what?
- T and B can make an application to the court to appoint or replace a T
when will the court replace a T?
The court will only replace T if:
o It is expedient to do so;
o It is inexpedient, difficult or impractical to do so without an order; and
o It is in the best interests of the trust
what is the role of an attorney / deputy?
They are appointed and perform T’s duties for up to 12 months
how must an attorney / deputy be appointed?
- The delegation must be made by deed
- Written notice must be given to all other Ts and any person with the power to appoint new Ts within 7 days of delegation
what is the liability of T when an attorney/deputy is appointed?
- The delegating T remains liable for acts/errors of the attorney
