Trustees: Appointment, Retirement and Removal Flashcards
Who can be a trustee?
Adults with mental capacity;
Also, a company via a trust corporation
What is the minimum and maximum number of trustees over land?
Must have a minimum of 1 trustees and a maximum of 4.
What is the minimum and maximum number of trustees over personalty?
Minimum 1, no maximum.
Always beneficial to have more than one trustee but to also limit the number of trustees.
What are the three procedures a trustee can use to retire?
(i) Trust instrument may contain a power of retirement;
(ii) S39 TA 1925 - Trustee can retire with no replacement if there are 2 trustees, they retire by deed, and other trustees consent by deed;
(iii) S36(1) TA 1925 - Trustee must be replaced, appointed in writing by the continuing trustees and possibly the retiring trustee
What are the 7 grounds for replacing a trustee under s36(1) TA 1925?
Trustee must:
(a) be dead; (b) be outside the UK for 12 months; (c) wish to retire; (d) disclaim; (e) is unfit to act; (f) is incapable of acting; (g) is a minor
Who effects the replacement under the power of s36(1) TA 1925?
(A) person nominated in trust instrument;
(B) Continuing trustees (possibly retiring trustee);
(C) PR of the last surviving trustee if all died
When will the court replace a trustee?
If it is expedient to do so and it isn’t in the best interests of the trust for them to continue. Smaller grounds, e.g. dislike, are insufficient.
The court makes the appointment after an application by the trustees or beneficiaries.
What are the conditions that must be satisfied for a beneficiary to be able to force a trustee to retire?
(1) Trust doesn’t exclude the power;
(2) Trust doesn’t nominate someone to appoint new trustees;
(3) Beneficiaries must all be of full age and capacity and are all absolutely entitled to the trust property
Under a valid written direction from the beneficiaries to retire, what conditions must subsist to force the trustee to retire?
(a) reasonable arrangements have been made to protect the trustees rights;
(b) there will be two trustees or a trust corporation left; and
(c) another person is appointed to replace them or continuing trustees consent by deed to their retirement
What are the three ways an additional trustee can be appointed?
(1) S36 - continuing trustees nominate the new trustee in writing;
(2) S41 - Court appoints a new trustee if it is expedient to do so, or if it would be inexpedient for the court to not get involved;
(3) S19 - Beneficiaries can serve a written direction requiring the appointment of an additional trustee
What happens to trust property and the remaining trustees if a trustee dies?
Survivorship applies, so the legal title devolves to the surviving trustees;
if only one trustee remains, they should be advised to appoint a replacement trustee.
What happens if an attorney is appointed in place of one trustee?
The attorney assumes the role of trustee, and the appointing trustee remains liable for all of the attorneys acts.
