I would welcome comments on transferring trust land to new trustees. I have inherited a trust where the land was transferred from the outgoing trustees into the the names of the new trustees by way of a Form TR1 which was lodged with the Land Registry in preference to executing a Deed of Appointment & Retirement of Trustees.
One of the outgoing trustees has queried whether the Form TR1 is effective in discharging him from the trusts of the settlement, and I wasn’t sure of the answer. In a Deed of Appointment & Retirement, it is expressly stated that the outgoing trustees are discharged from the trusts, but there is no equivalent wording in the TR1.
Many thanks, Jane
Surely, a TR1 deals only with a transfer of a legal title. Where there is a change of trustees, the TR1 merely moves the assets from the name of the “old” trustees into the name of the “new” trustees, it does not effect a transfer of the trusteeship. This will be particularly evident if the power of appointment of trustees is vested in someone other then the “old”trustees.
I suggest that if only a TR1 has been completed the new legal owners merely hold the land effectively as nominees for the trustees, who have not been discharged. Those person purportedly appointed as trustee under the TR1 may be trustees de son tort, meaning that they are unable to exercise any of the trustee powers and have all the liabilities of a trustee without any of the benefits (e.g. the right to be indemnified out of the trust fund).
I suggest that a DART (deed of appointment and retirement of trustees) be executed ASAP in order to regularise the situation.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals