Appointment of Trustees vests with Settlor

Trusts Discussion
1

Morning all,

Please can anyone help with the following?

A settlement was prepared by X (the settlor) appointing themself and Y as trustees. The appointment of new trustees vests with the settlor during their lifetime, as per the terms of the settlement.

X and Y are currently going through a divorce and, as part of the divorce agreement, X has consented to retire from all trusts (including their own) as trustee.

If X retires as a trustee of their settlement and appoints new trustees, am I right in thinking that, as X remains the settlor, they continue to hold the power to appoint trustees and therefore, should new trustees need to be appointed in the future whilst X is still living, it would be for X to appoint them?

Is there any way for X to disclaim this power and for the statutory power of appointment to apply?

Many thanks in advance
James

2

Yes, you are correct, it is a problem.

Does the settlement contain an express power to release powers or an express power to vary administrative provisions?
If not, it may be possible to vary the terms using a power or advancement or appointment.

3

LPA 1925 s156:(1) A person to whom any power, whether coupled with an interest or not, is given may by deed disclaim the power, and, after disclaimer, shall not be capable of exercising or joining in the exercise of the power.

(2) On such disclaimer, the power may be exercised by the other person or persons or the survivor or survivors of the other persons, to whom the power is given, unless the contrary is expressed in the instrument creating the power.

Jack Harper