Trustees

Question 1

Who can be trustee?

Answer 1

Any adult person can be trustee.
Persons considered unfit to act as trustee if:
1. are undischarged bankcrupt
2. convicted of offences involving dishonesty or deception
2. lack capacity to act due to mental disorder, ill health or other disability.

Trust corporations are corporate trustees carry out trust businee for profits.

Question 2

Minimum and maximum of trustees

Answer 2

Trust over land: min 2 (for overreaching) and max 4 (allowed to registered as legal owners)
Trust over personalty may be sole and no maximum

Question 3

Retirement of trustees

Answer 3

1. Trust instrument may contain express power for trustees to retire (unusual)
2. S39 of Trustee Act 1925 allows a trustee to retire without being replaced when:
   (a) there will be 2 trustees or a trust corporation
   (b) the trustee retires by deed
   (c) the other trustees consent by deed.
3. S36(1) of TA 1925: retiring trustee must be replaced by appointment of new one

Question 4

Who can appoint new trustee (both replacement and additional)?

Answer 4

In the following order:
1. The person nominated in the trust instrumemnt, if none (s 36 TA1925)
2. The continuing trustees (which include retiring trustee if they are willing) or if all trustees have died the personal representatives of the last surving/continuing trustee (s36)
3. The court has the power to appoint as last resort

In addition beneficiaries may appoint (in trust of land) in accordance with TOLATA 1996

Question 5

Required formalities of appointment of trustee

Answer 5

S36 of TA 1925: must be in writing
Advantageous to use a deed (s40 TA1925: a deed automatically vests the trust properties (with few exception such as share) in the continuing and new trustee.

Question 6

Is a retired trustee liable for breach of trust?

Answer 6

A retiring trustee remain liable for their own breach but will not be liable for future breach unless they retired to facilitate the breaches.

Question 7

Grounds for replacing a trustee under s36 TA 1925

Answer 7

1. The trustee is dead
2. remains outside UK for more than 12 months
3. Desires to be discharge
4. Refuse to act
5. is unfit to act
6. is incapable of acting (mental or physical incapacity)
7. Is a minor

Can only be removed if a replacement is found.

Question 8

How courts replace trustee/appoint new trustee (s41 of TA 1925)

Answer 8

1. Grounds: if it is expedient to do so and it si otherwise inexpedient, impractical without court’s assistance.
2. Court make appointment following application by the trustees or beneficiaries
3. Court will only replace a trustee of it is not in the best interest of the trus for them to continue.

Question 9

Appointment by beneficiaries in trust of land (S19 TOLATA 1996)

Answer 9

1.Beneficiaries can serve a written direction to trustee(s) to retire and appoint a specified person or appoint additional trustee (in direction).
2.S19 does not apply if the trust instrument (a) exclude it or (b) nominates sb to appoint trustee
3.Beneficiaries must be of full age and capacity, and taken together are absolutely entited to trust property.

Question 10

What happened in case of death of a trustee (right of surivivorship)?

Answer 10

1.If 2 or more trustees are appointed they will hold legal title to property as joint tenant. If one dies/retire/removed the legal title will vest in the survivor(s) through right of survivorship.
2.If there is only 1 trustee left, it is advised to appoint a replacement trustee under s36 TA 1925 to ensure continuity of trust.

Question 11

Appointment of an attorney

Answer 11

1. A trustee can delegate their function to an attorney.
2. Delegation must be made in a deed and run up to 12 months
3. Written notice must be given to other trustees and any other person with power to appoint new trustees within 7 days.
4. Trustee will be liable for any defaults of the attorney.