Correct approach to trustee appointment?


(mccabe760) #1

J died in 2015 leaving will from 2012 with STEP standard provisions second edition.

Will appointed A as executor.
Will appointed B as trustee.
If B doesn’t want to act or can’t act then C is appointed by default.
If C doesn’t want to act or can’t act then D and E are appointed by default.
No other provision in will for appointment or removal or trustees.

J left two twins aged 6. Residue is held in trust for them until 21 (10% each) and 25 (40% each).

F and G have adopted the twins. It is thought sensible for F and G to be the trustees instead of the others.

Solicitors acting for the executors have prepared three deeds of retirement as follows:-

  1. B retires as a trustee and says that wants to appoint C as trustee - but no appointment effected within deed, just referred to in recitals.
    2 As in 1 - C retires as trustee and D and E appear to take over, but no specific appointment in deed.
  2. D and E appoint F and G as trustees and retire.

We have pointed out to the solicitors who prepared the deeds that only one deed is necessary - C appointing F and G and then retiring. We have stated that B cannot retire by executing a deed as a retiring trustee and then C takes over by default - by executing the deed they will be deemed to have accepted the position of trustee and the default provisions no longer apply.

The solicitors have said they will not entertain any amendments and the reason they have done it this way is to ‘clear off’ the previous trustees and protect the identity of the adoptive parents. are we correct in thinking that if the executors want to go through this series then the trustees must exercise the right to appoint trustees under the trusts legislation.

Michael McCabe,
Heath Square Private Client


(Paul Saunders) #2

The present proposals appear to somewhat fudge the situation, as if B “retires” as trustee, they must have accepted the appointment, so that C cannot just step in by default. B would need to disclaim for C to take over by default. If they then immediately retired in favour of F and G, this could be argued to demonstrate that C did not want to act, so that D and E are the “proper” trustees and not F and G. A similar argument could be made to support C becoming trustee should B only act “to retire”, which clothes the whole situation with uncertainty.

It seems to me that any uncertainty can be removed if all of B, C, D, and E disclaim the trusteeship, so that the statutory power to appoint trustees falls to the executor, A.

If F and G are considered appropriate persons to act as trustees, A could then exercise the statutory power to appoint them.

Paul Saunders