Appointment, Retirement & Removal Of Trustees

Question 1

How does a trustee retire from his position?

Answer 1

Retirement usually takes place in conjunction with the appointment of a replacement trustee, meaning that the number of trustees remains the same.

In circumstances where her the no. of trustees will reduce, the trustee may only retire if: (i) he obtains the consent of the continuing trustees, and (ii) where there will be at least 2 trustees or a trust corporation remaining.

Retirement must be by deed.

Question 2

A trustee may expressly retire by complying with s39(1) TA 1925. What are the requirements?

Answer 2

There must be a deed declaring the trustee’s desire to be discharged.
The remaining trustees must consent to the retirement in the same deed.
After their retirement, there will be either a trust corporation/at least 2 trustees remaining.

Question 3

What are the grounds on which the remaining trustees can remove a defaulting trustee?

Answer 3

Limited situations: death, retirement, being unfit to act.

A replacement trustee must be appointed.

Question 4

How can a trustee retire?

Answer 4

A trustee may expressly retire by complying with s39(1) of the TA 1925. The requirements are:
There must be a deed declaring the trustee’s desire to be discharged;
The remaining trustees must consent to the retirement in the same deed.
After the trustee’s retirement, there will be either a trust corporation or at least 2 trustees remaining.

Question 5

s36(1) TA 1925 - appointment of replacement trustees - a power exercisable by the trustees.

Answer 5

Criteria - a new trustee may appointed (in writing) in the place of a trustee who:
Is dead
Remains out of the UK for more than 12 months
Desires to be discharged
Refuses to act in the trusts
Is incapable of acting in the trusts: lacks capacity
Is unfit to act: bankrupts and persons convicted of offences involving dishonesty/deception.