Trustee appointment, retirement and removal Flashcards
Who can be a trustee?
Most adults with mental capacity can be appointed as a trustee.
A company can also be appointed as a trustee so long as it is authorised to do so by its constitutional documents.
How many trustees should there be in a trust of land?
At least two human or a sole trust corporation.
There should be no more than four.
How many trustees can you have in a trust of personalty?
One, but you can appoint more.
There is no maximum.
What three ways can a trustee retire?
The trust instrument may contain express wording
Section 39 of the Trustee Act (allowing a trustee to retire without replacement provided conditions are met)
Section 36(1) of the Trustee Act (where a retiring trustee must be replaced)
How can a trustee retire without being replaced under section 39 of the Trustee Act?
There should be two trustees or a trust corporation left
The trustee will retire by deed
The other trustees consent by deed.
How can a trustee retire under section 36(1) of the Trustee Act?
A retiring trustee must be replaced by the appointment of a new trustee.
The person nominated in the trust instrument or the continuing trustee will appoint a new trustee.
The appointment must be made in writing and ideally in deed due to the fact it automatically vests the trust property in the new trustee.
Is a retired trustee liable for breaches of trust?
Only for their own breaches
They will not be liable for future breaches unless they retired to facilitate them.
Which four ways can a trustee be removed?
Express wording in the trust instrument
Section 36(1) of the Trustees Act (replacement of a trustee)
Section 41 of the Trustees Act (where the court can replace a trustee)
Section 19 of TLATA (beneficiaries can direct a trustee to retire)
What are the grounds to remove and replace a trustee under section 36(1)?
Death of a trustee
They remain out of the UK for 12 months
They desire to be discharged
They refuse to act
They are unfit to act
They are a minor
Who can effect the replacement of a trustee under section 36(1)?
The person nominated in the trust instrument
Otherwise, the continuing trustees or PR of the last surviving trustee.
How should the replacement of a trustee under section 36(1) be documented?
In writing.
Ideally in deed but not an absolute requirement.
When will the court replace a trustee under section 41?
Where it is practical to do so and in the best interests of the trust.
An application must be made by the trustees or beneficiaries.
How can beneficiaries direct a trustee to retire under section 19?
They can serve a written direction on the trustee they wish to direct in the absence of an exclusion clause/nominated person in the trust document.
What beneficiaries are entitled to direct a trustee to retire under section 19?
They must of full and capacity
Taken together they are absolutely entitled to the trust property.
How should retirement of a trustee under section 19 be documented?
The trustee must retire by deed if:
Reasonable arrangements have been made to protect their rights
After their retirement, there will be two trusts or a trust corporation left
Another person is appointed to replace them or the continuing trustees by consent to their retirement.
