Trustee 2 Flashcards
Q1. Under Article 44, when can a Jersey court appoint a resident trustee?
A1. If a Jersey trust has no trustee resident in Jersey, a beneficiary may apply for a local resident to be appointed as an additional trustee (not replacing an existing trustee).
Q2. Why is Article 44 rarely used compared to other court powers?
A2. Because Article 51 (the broader power to make orders regarding trustees) typically offers a wider scope and is more practical for appointing or removing trustees.
Q3. Which article gives Jersey courts a general power to make orders about trustees, including appointing a new or additional one?
A3. Article 51 of the Trusts (Jersey) Law 1984 allows the court to make any order concerning the trustee of a Jersey or foreign trust, including appointment and removal.
Q4. Does the court need to wait until no other method of appointment is available before using Article 51?
A4. No. There is no rule that the court’s power is a “last resort.” The court can step in even if there are other theoretical means, especially if there’s a dispute.
Q5. If the court appoints a new trustee, does that trustee have the same powers and duties as the original one?
A5. Yes. Article 51(5) confirms that a trustee appointed by the court “may act as if originally appointed,” with the same powers, discretions, and duties.
Q6. Can the court handle vesting (legal ownership) of trust property when it appoints a new trustee?
A6. Yes. Article 51(4) says the court can impose conditions, including how trust property is vested in the new trustee.
Q7. What is a trustee de son tort?
A7. Someone who intermeddles with trust affairs as if they were a trustee, even though not formally appointed. They can be held liable as if a trustee, but they are not the legal owner of trust property.
Q8. Is an agent (acting on behalf of an actual trustee) a trustee de son tort?
A8. No. An agent or nominee is not personally assuming the role of a trustee. A trustee de son tort must actively behave as if they themselves are the trustee.
Q9. If someone is named trustee but has not accepted, can they refuse the position?
A9. Yes. They can “disclaim” by giving written notice to the settlor or any other trustee within a reasonable time of learning of the appointment, provided they haven’t already acted as trustee.
Q10. What if the person can’t contact the settlor or any other trustee to disclaim?
A10. They must apply to the court for relief from the appointment. The court then decides whether to release them from the trustee role.
Q11. Under Article 19(1), can a single trustee resign at will if it’s not the only trustee?
A11. Yes. A trustee, as long as they’re not a sole trustee, can resign by giving written notice to their co-trustees.
Q12. What if all trustees try to resign simultaneously, leaving no trustee in office?
A12. Those resignations are ineffective under Article 19(3). You cannot leave the trust without any trustee.
Q13. How does Article 51 allow the court to remove a trustee?
A13. It authorizes the court to make any order about a trustee’s conduct or position, including removal. A beneficiary, the trustee, enforcer, or the Attorney General can apply (or anyone else with court permission).
Q14. On what basis does the Jersey court decide whether to remove a trustee?
A14. The welfare of the beneficiaries is paramount. The court looks at whether the trustee’s presence (due to conflict, hostility, or misconduct) is detrimental to the trust’s competent administration.
Q15. What happens to trust property when a trustee retires or is removed?
A15. They must formally transfer the property to the continuing or new trustee(s). Ownership in trust doesn’t automatically pass in Jersey; it requires proper vesting actions.
Q16. What security rights does a retiring trustee have before handing over assets?
A16. Under Article 43A, they can require reasonable security (like an indemnity) for existing or future liabilities incurred while acting as trustee. They also have an automatic non-possessory lien over trust assets.
Q17. What is a “non-possessory lien” in this context?
A17. It’s a floating charge on the trust fund for a trustee’s personal liabilities or costs. It survives even after the trustee relinquishes possession or retires.
Q18. Must a retiring trustee always accept an escrow arrangement for disputed fees?
A18. No. Whether an escrow is “reasonable security” depends on the facts. The trustee can refuse if there’s no fair mechanism for determining or paying their fees.
Q19. If one of two joint trustees dies, what happens to the trust property?
A19. It automatically vests in the surviving trustee(s), because they held joint legal title.
Q20. If a sole trustee dies, who can appoint a new trustee and vest property?
A20. Usually the personal representative of the deceased (or the court) will appoint a successor. But only the court (or principal heir in some cases) can make vesting orders.
