The fiduciary relationship and trustees

Question 1

does the settlor’s involvement cease once they have created the trust?

Answer 1

yes they do not automatically have the right to name replacement trustees.

Question 2

how can replacement trustees be appointed?

Answer 2

• any express powers in trust instrument.
• statutory power to appoint trustees.
• beneficiaries exercising saunders v vautier.
• • in the case of charitable trusts, by the charity commission.
• by the court.

Question 3

when can the statutory power to repalce trustees exercised?

Answer 3

• on the death of a trustee.
• if the trustee is abroad for over a year.
• if an appointed trustee is a minor or lacks capacity to act.
• if a trustee wishes to retire, refuse to act or is unfit to act/

(power may be exercised by the eprson nominated in the trust instrument to appoint trustees or surviving, continuing trustees.

If all the trustees have died, power is exercisable by the PRs of the last to die.

Question 4

how can saunders v vautier rights be used for the beneficaires to appoint a new trustee?

Answer 4

must be exercised in writing and cannot be exercised in cases where the trust instrument contains an express power to appoint trustees.

Question 5

do similar rules apply for removal and appointment of trustees?

Answer 5

yes.

Question 6

can trustees voluntarily retire?

Answer 6

can voluntarily retire by deed where there are at least two people or one trust corporation to act as trustees and the co-trustees and any person with a power to appoint a trustee consents/.

trustees who retires should obtain a formal discharge of liability from the beneficiaires.

Question 6

do beneficiaries have a power to compel a trustee to retire?

Answer 6

yes, made in writing and all beneficiaries consent.

only if two trustees remain.

Question 7

what happens if executor want to retire but are also trustees>

Answer 7

named executors can renounce their position and can appoint new trustees before doing so.

Question 8

what is the power of advancement>

Answer 8

allows trustees to advance up to 100% of a beneficiary’s prospective entitilement to the capital.

But if another beneficiary has a prior interest in the income, their written consent is needed to exercise this power.