Chapter 6: Appointment, retirement and removal of trustees

Question 1

Trustees are usually appointed by the settlor in the trust instrument. If they are not, will the trust fail?

Answer 1

No, the court can appoint trustees

Question 2

Must a trustee have notice of a trust?

Answer 2

Yes

Question 3

How can a trustee accept office of trustee?

Answer 3

Expressly or impliedly

Question 3

Are trustees obliged to accept the trust?

Answer 3

No

Question 4

Can a trustee accept a trust in part and disclaim it in part?

Answer 4

No

Question 5

What is the minimum number of trustees?

Answer 5

• 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.

Question 6

What is the maximum number of trustees for a trust of land?

Answer 6

Four

Question 7

What is the maximum number of trustees for a trust of pure personalty?

Answer 7

There is no maximum number

Question 8

Once a trust has been created, does the settlor have the power to appoint new trustees?

Answer 8

No, unless there is an express provision in the trust instrument providing such power

Question 9

If the trust does not designate a specific person as having power to appoint additional trustees, can additional trustees be appointed?

Answer 9

• 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)

Question 10

Can replacement trustees be appointed?

Answer 10

One or more new trustees may be appointed to replace a trustee who dies, refuses to act, wishes to be discharged etc

Question 11

Which four people have the power to appoint a replacement trustee?

Answer 11

• Person named in trust instrument with this power
• Surviving trustees
• PRs of the last surviving trustee
• The court

Question 12

Is there an obligation to replace all outgoing trustees?

Answer 12

No

Question 13

Can the power to appoint be used to increase the number of trustees?

Answer 13

Yes, subject to the maximum number of four trustees for a trust of land

Question 14

Should a retiring trustee be allowed to help choose a new trustee?

Answer 14

Yes, if they are being replaced

Question 15

What are the formalities for appointing a replacement trustee?

Answer 15

The appointment must be made in writing, but need not be made by deed

Question 16

Do beneficiaries have power to control the trustees?

Answer 16

No, unless there has been a breach. Only in limited circumstances will beneficiaries be able to appoint trustees

Question 17

When will beneficiaries have the power to select trustees?

Answer 17

1. No person is nominated in the trust instrument to appoint new trustees
2. All of the beneficiaries under the trust are of full age and capacity and taken together are absolutely entitled to the trust property
3. 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

Question 18

Does the Court have the power to appoint new trustees?

Answer 18

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

Question 19

When can a trustee retire from office without being replaced?

Answer 19

1. They obtain consent by deed of all their co-trustees
2. They leave in office at least 2 trustees or a trust corporation

Question 20

In which three circumstances can a trustee be removed from office without their consent?

Answer 20

• They become bankrupt or incapacitated
• By beneficiaries if requirements satisfied
• By the Court

Question 21

Can a trustee be removed if they are outside of the UK?

Answer 21

Yes, but the absence from the UK must be for a continuous period of 12 months or more