Trust 10 - Trustees

Question 1

What general duty is on trustees?

Answer 1

To act

• honestly and
• in good faith,
• for benefit of beneficiaries

Question 2

What is the difference between trustee duties and trustee powers?

Answer 2

• Powers: authorised but not compulsory
• Duties: mandatory

Question 3

Who can be trustees?

Answer 3

• No minors

Question 4

What is the minimum/max number of trustees?

Answer 4

Land - min 2 max 4

Other - min 1 no max

Question 5

What happens if there’s only 1 trustee who resigns?

Answer 5

The trustee holds the land on bare trust for the Bs until a new trustee can be found:

Question 6

How does a new trustee of a lifetime trust get appointed after a single trustee has resigned?

Answer 6

• trust deed
• outgoing trustee can appoint
• S v V powers of the Bs
• Court can appoint

Question 7

How does a new trustee of a testamentary trust get appointed after a single trustee has resigned when:

PRs named as trustees but they want to renounce their position as PRs

Answer 7

PRs have power to appoint new trustees

Question 8

How does a new trustee of a testamentary trust get appointed after a single trustee has resigned when:

3rd party named as trustees but they can’t act?

Answer 8

PRs will become trustees, then have power to appoint new trustees

Question 9

How does a new trustee of a testamentary trust get appointed after a single trustee has resigned when:

3rd party named as trustees but they don’t want to act?

Answer 9

• named trustee can nominate their replacement

OR

• PRs can appoint

Question 10

What methods are there for appointing new trustees for a subsisting trust?

Answer 10

• Any express powers in trust instrument
• outgoing trustee
• Beneficiaries exercising S v V rights
• The court
• Charity Commission for Charitable trusts

Question 11

In what circumstance does the general statutory power to replace a trustee apply and who is it exercised by:

Answer 11

• death of trustee,
• trustee abroad for over 1 year,
• minor/lacks capacity,
• wants to retire/refuses/unfit

Exercised in writing by:

• persons nominated in instrument
  OR
• surviving/continuing trustees
  OR
• If all trustees are dead, by PRs of last to die

Question 12

In what circumstance does the general statutory power to appoint an additional trustee apply and who is it exercised by:

Answer 12

Exercised in writing by:
- persons nominated in instrument
IF NONE
- current trustees

NOTE - cannot be used to increase trustees to more than 4

Question 13

How do beneficiaries exercising S v V rights appoint a replacement trustee?

Answer 13

• In writing
• Cannot be used where instrument contains express power to appoint trustees

Question 14

When shouldn’t the court appoint a trustee?

Answer 14

Where there’s dispute between beneficiaries as to whether they’d be appropriate

Question 15

How can trustees be removed?

Answer 15

• Check trust instrument
• statutory powers
• Court can where trustee is bankrupt, lacks capacity or is a company in liquidation
• Charity Comission

Question 16

In what 2 ways can trustees retire?

Answer 16

1. Voluntary retirement
2. Direction of beneficiaries: in writing & all agree

Question 17

How can trustees voluntary retire?

Answer 17

• By deed
• Where at least 2 other people or 1 trust corporation are there to act as trustees
• Co-trustees & anyone else with power to appoint trustees consent
• Should also obtain formal discharge of liability from beneficiaries

Question 18

How do beneficiaries exercising S v V rights remove a replacement trustee?

Answer 18

• in writing
• all beneficiaries agree