Trusts - Administration of Trusts

Question 1

Trustees: Appointment, Removal and Retirement

1. Who can be a trustee?
2. What is the minimum number of trustees?

Answer 1

1. Who can be a trustee:
   - Adults with mental capacity
   -A company.
2. Minimum and maximum:
   Minimum: one. But for the sale of land, there needs to be two trustees or a sole corporation.
   No maximum. But for trusts over land there is a maximum of four trustees.

Some are disqualified, but that is outside the scope.

Question 2

Trustees: Retirement

If the trustee wishes to retire, there may be an express power for trustees to do so (but this is unusual). More commonly, they may use either s.36 TA 1925 or s.39 TA 1925.

1. Where s.36 is used, the retiring trustee must be replaced by the appointment of a new trustee. Who can appoint the new trustee? (2 points)

The appointment must be in writing. Further, explain why it is advantageous to use a deed.

2. Section 39 allows the trustee to retire without being replaced if three conditions are met:
3. Is a trustee who has retird liable for breaches of trust?

Answer 2

1. Section 36, TA 1925.
   a. The person nominated in the trust instrument, but if none.
   b. The continuing trustee(s), including the retiring trustee if they are willing to join.

A deed automatically vests the trust property in the continuing and new trustees.

2. Section 39, TA 1925.
   a. There will be two trustees or a trust corporation left;
   b. The trustee retires by deed; and
   c. The other trustees consent by deed.
3. They are only liable for their own breaches but not future breaches unless they retired to faciliate the breaches.

Question 3

Trustees: Removal under s.36, TA 1925

The seven grounds for removal (and replacement) under section 36 are that the trustee:

Answer 3

(a) is dead
(b) is unfit to act
(c) refuses to act
(d) desires to retire
(e) is physically/mentally incapable of acting
(f) is a minor
(g) remains outside of the UK for more than 12 months

Question 4

Trustees: Removal by beneficiaries

Section 19 TOLATA allows beneficiaries to remove a trustee and appoint the person specified in the direction. When is this not allowed?

Following a valid written direction, the trustee must retire by deed if: (3 conditions)

Answer 4

• Where the trust instrument excludes it;
• Where the trust instrument nominates someone to appoint new trustees.
• Where a beneficiary is not of full age and capacity, and absolutely entitled to the trust property.

Trustee must retire by deed if:
- reasonable arrangements have been made to protect their rights;
- after retirement, there are two trustees or a trust corporation;
- another person is appointed or the continuing trustees conssent by deed to the retirement.

Question 5

Trustees: Removal by court

The court will replace a trustee if…

The court makes the appointment following an application by…

The courts will only replace a trustee if it is not in the best interests of…

Answer 5

…it is expedient to do so and inexpedient to appoint without the court’s assistance.
…the trustees or beneficiaries.
…the trust for them to continue.

Question 6

Appointment of additional trustees

Done in the same manner as for removal + appointment: s.36, s.41 of TA 1925 and s.19 TLATA.

Question 7

Appointment of an attorney

An attorney is appointed where a trustee is concerned that they…

The delegation should be made by… and can run for a period of up to…

What must be given, to whom and when?

Would the delegating trustee be liable for the acts of the attorney?

Answer 7

…might not be able to perform their functions for a period of time.
…deed; 12 months.

Written notice; all other trustees and persons with power to appoint; within seven days of delegation.

Yes.