Chapter 6: Appointment, retirement and removal of trustees Flashcards
Trustees are usually appointed by the settlor in the trust instrument. If they are not, will the trust fail?
No, the court can appoint trustees
Must a trustee have notice of a trust?
Yes
How can a trustee accept office of trustee?
Expressly or impliedly
Are trustees obliged to accept the trust?
No
Can a trustee accept a trust in part and disclaim it in part?
No
What is the minimum number of trustees?
- There is no minimum number
- Trusts of land require at least two trustees or a trust corporation to give valid receipt for capital money arising on sale of land.
What is the maximum number of trustees for a trust of land?
Four
What is the maximum number of trustees for a trust of pure personalty?
There is no maximum number
Once a trust has been created, does the settlor have the power to appoint new trustees?
No, unless there is an express provision in the trust instrument providing such power
If the trust does not designate a specific person as having power to appoint additional trustees, can additional trustees be appointed?
- Yes, the existing trustees have this power
- The power cannot be used to increase the number of trustees to more than four (even if the trust property is for pure personalty)
Can replacement trustees be appointed?
One or more new trustees may be appointed to replace a trustee who dies, refuses to act, wishes to be discharged etc
Which four people have the power to appoint a replacement trustee?
- Person named in trust instrument with this power
- Surviving trustees
- PRs of the last surviving trustee
- The court
Is there an obligation to replace all outgoing trustees?
No
Can the power to appoint be used to increase the number of trustees?
Yes, subject to the maximum number of four trustees for a trust of land
Should a retiring trustee be allowed to help choose a new trustee?
Yes, if they are being replaced
What are the formalities for appointing a replacement trustee?
The appointment must be made in writing, but need not be made by deed
Do beneficiaries have power to control the trustees?
No, unless there has been a breach. Only in limited circumstances will beneficiaries be able to appoint trustees
When will beneficiaries have the power to select trustees?
- No person is nominated in the trust instrument to appoint new trustees
- All of the beneficiaries under the trust are of full age and capacity and taken together are absolutely entitled to the trust property
- Beneficiaries act unanimously
If the above is satisfied, beneficiaries may, by written instruction, order one or more of the existing trustees to retire and order the appointment of a new trustee(s) of the beneficiaries choice
Does the Court have the power to appoint new trustees?
The court has express power to make an order appointing new trustees in substitution or in addition whenever it is expedient to do so or would be difficult or impracticable to do without the court
When can a trustee retire from office without being replaced?
- They obtain consent by deed of all their co-trustees
- They leave in office at least 2 trustees or a trust corporation
In which three circumstances can a trustee be removed from office without their consent?
- They become bankrupt or incapacitated
- By beneficiaries if requirements satisfied
- By the Court
Can a trustee be removed if they are outside of the UK?
Yes, but the absence from the UK must be for a continuous period of 12 months or more
