Bank refusing to accept trustees acting by majority

Under the terms of his will, Mr. F specifically provided that the trustees of a Will Trust in favour of his widow during her life time could act by majority. The three executors of his will, and the trustees of the Will Trust arising, consist of his sister, his nephew and a non family member. There is unfortunately bad blood between the sister and the widow, which has culminated in the sister refusing to sign any cheques in favour of the widow. The practical answer is clearly for the other two trustees to act alone.
The Trustees’ High Street Bank, even though advised by the trust’s lawyers of the terms of the trust, are refusing to amend the mandate without the consent of the widow. Other than opening a new bank account with another bank, any suggestions?
David Rothenberg
Blick Rothenberg LLP

I take it the current mandate is “all to sign”. If so, this requirement will apply to the authority to change the mandate. The fact the trust instrument permits the trustees to act by a majority does not affect the banking mandate, which will be governed by banking law, not trust law.

With the “Know Your Customer” requirements placed upon financial institutions, particularly when opening a new client relationship, another bank may well require to complete Client Due Diligence on all 3 trustees and have sight of a trustees’ resolution authorising the new bank account being operated by only/any 2 of the trustees. Whilst the local branch may be willing to consider a flexing of the strict requirements, any decision would likely need to be endorsed by the bank’s compliance team.

I am not sure there is any innovative solution and it may perhaps only be resolved if the sister can be persuaded either to comply with her duties as trustee or retire as a trustee. In the latter case, this could be voluntary or following the intervention of the court.

Paul Saunders

Surely the widow would give her consent; it is in her interest to do so?
Is the sister unwilling to sign a new bank mandate?
If the current trustees are unable to amend the existing mandate because they can’t or won’t agree then they are unlikely to persuade another bank to take them on.
Could funds be transferred to a client account and administered by the professional (whose firm operates the client account) on the authority of two of the trustees?
Maxine Higgins
Citroen Wells

If the professional is a solicitor, this is exactly type of “provision of banking facilities” that the SRA gets so hot under the collar about, and consequently the solicitors can’t do it.

Julian Cohen


New Inheritance Tax forms have been published today by HMRC.

Approach these with caution. I’ve had trouble with the IHT422 (apply for an
IHT reference) which I couldn’t open on either of two unrelated computers at
my office. I eventually was able to open it with the assistance of Internet
Explorer, not Mozilla Firefox (on which the form froze).

Those of you who have an IT department may like to have that department open
one of the forms rather than spending time doing it yourself.

Julian Cohen, Solicitor