Administration of Trusts: Appointment, Removal, and Retirement

Vocabulary and statutory principles regarding the appointment, removal, and retirement of trustees based on the SQE1 syllabus.

Trust corporations

Corporate trustees that carry out trust business for profit.

Minimum number of trustees for land trusts

At least two human trustees or a sole trust corporation to ensure beneficial interests are overreached upon sale.

Maximum number of trustees for land trusts

Four trustees.

Trustee Act (TA) 1925

Statute detailing the powers that trustees can exercise in the administration of a trust.

Trusts of Land and Appointment of Trustees Act (TLATA) 1996

Statute detailing the powers that beneficiaries can exercise regarding the appointment and removal of trustees.

Section 39 of the TA 1925

Allows a trustee to retire without being replaced if at least two trustees or a trust corporation remain, and the retirement and other trustees' consent are made by deed.

Section 36(1) of the TA 1925 (Replacement grounds)

Allows replacement if a trustee is dead, remains outside the UK for more than 12 months, desires discharge, refuses to act, is unfit, is incapable, or is a minor.

Section 40 of the TA 1925

Provisions that a deed automatically vests trust property (excluding company shares and certain other property) in the continuing and new trustees.

Section 41 of the TA 1925

Power for the court to replace or appoint a trustee if it is expedient to do so and it is otherwise difficult or impractical to do so without the court’s assistance.

Section 19 of the TLATA 1996

Allows beneficiaries of full age and capacity, who are absolutely entitled to trust property, to serve a written direction for a trustee to retire or for an additional trustee to be appointed.

Section 36(6) of the TA 1925

Allows for the appointment of additional trustees (up to a maximum of four) by the person nominated in the trust instrument or the continuing trustees.

Section 18 of the TA 1925

Provides that if one of multiple trustees dies, the legal title to the property devolves to the surviving trustees as joint tenants.

Section 25 of the TA 1925

Allows a trustee to delegate their functions to an attorney/deputy by deed for a period of up to 12 months.

Delegation notice requirement (s 25 TA 1925)

A trustee delegating functions to an attorney must give written notice within seven days to all other trustees and any person with the power to appoint new trustees.

Liability for an attorney's acts

A delegating trustee is automatically liable for the acts or defaults of the attorney as if they were the acts or defaults of the trustee themselves.