Removal and Retirement of Trustees Flashcards
Which of the following is a statutory basis for removing a trustee and appointing a replacement?
A. Section 36 Trustee Act 1925
B. Section 1 Trustee Act 2000
C. Section 15 Trustee Act 1925
D. Section 27 Trustee Act 1925
A. Section 36 Trustee Act 1925
Explanation: Section 36 TA 1925 provides a mechanism for replacing a trustee who has died, is untraceable, refuses to act, etc. This often results in effective removal.
Which of the following is NOT required for a trustee to retire voluntarily without replacement?
A. Deed signed by the retiring trustee
B. Written consent of all co-trustees
C. At least two trustees or a trust corporation remain
D. A court order
C. A court order
Explanation: Voluntary retirement can be done via deed, consent, and leaving at least two trustees. A court order is not needed unless other conditions cannot be met.
A trust has three trustees. One has become mentally incapable. Which legal route allows the others to remove and replace him?
A. Section 41 Trustee Act 1925
B. Section 27 Trustee Act 1925
C. Section 14 Trusts of Land and Appointment of Trustees Act 1996
D. Inherent jurisdiction of the High Court
A. Section 41 Trustee Act 1925
Explanation: Section 41 gives the court power to remove a trustee who is incapable of acting and appoint a replacement. Inherent jurisdiction may also apply but is a fallback.
A trustee of a non-charitable trust refuses to act, and the remaining trustees wish to remove and replace her. What is the most appropriate legal basis?
A. Apply to the Charity Commission
B. Use the express clause in the will
C. Apply under s.61 Trustee Act 1925
D. Use s.36 Trustee Act 1925 to replace her
D. Use s.36 Trustee Act 1925 to replace her
Explanation: Section 36 allows for replacement where a trustee refuses to act. No court involvement is needed if statutory or express powers exist.
Which of the following powers is NOT available under the court’s inherent jurisdiction to remove a trustee?
A. Removing for dishonesty
B. Replacing a trustee who has died
C. Preventing conflict of interest
D. Acting in best interests of beneficiaries
B. Replacing a trustee who has died
Explanation: If a trustee dies, the court’s inherent jurisdiction is not required — statutory powers (e.g. s.36) are sufficient.
What happens if all adult beneficiaries with absolute vested interests agree a trustee should retire?
A. A court order must be obtained
B. The trustee must retire in writing
C. The trustee cannot be forced to retire
D. A deed of retirement must be signed by the settlor
B. The trustee must retire in writing
Explanation: Under the rule in Saunders v Vautier, if all beneficiaries are sui juris and absolutely entitled, they can compel a trustee to retire via a written notice.
Trustee A wants to retire. The trust instrument is silent. Trustee B consents. Trustee C does not. There are three trustees. What is the result?
A. A can retire because one other trustee agrees
B. A must seek a court order to retire
C. A cannot retire unless all co-trustees consent
D. A can retire only if the beneficiaries agree
C. A cannot retire unless all co-trustees consent
Explanation: All co-trustees must consent in writing to a retirement for it to be valid under the statutory procedure.
Which of the following is TRUE about retirement of trustees in charity trusts?
A. The only route is via s.36 TA 1925
B. The beneficiaries must give permission
C. The Charity Commission can remove a trustee
D. A retiring trustee must apply to court
C. The Charity Commission can remove a trustee
Explanation: For charity trusts, the Charity Commission has equivalent powers to the court and can remove a trustee for incapacity, misconduct, or mismanagement.
