The scenario is that in his Will the deceased appointed A, B and C “to be the Executors and Trustees of this my Will.” The Will created a discretionary trust.
A and B renounced probate, which was accordingly taken out in the sole name of C.
C now wishes to wind up the trust by appointing all the assets to herself.
The Will states that the Trustees (being at least two in number or a trust corporation) can appoint the assets to the beneficiaries as they see fit.
On the face of it, I took the view that C will have to appoint a second trustee in order to deal with any of the assets in the trust. However, my question is whether A and B by appointing their role as executor are also deemed to have renounced their appointment as trustee. If not, then they can execute the deed of appointment with C, thereby avoiding the need to appoint a new trustee simply to execute the deed.
Instinctively I would say that the answer is that they have also renounced their trusteeship, but I can’t find any specific authority, so I’d be grateful for any assistance.
They can renounce as executors without being prevented to act as trustees if they wish to. A trusteeship has to be accepted expressly or by conduct. A sole acting trustee cannot appoint by using the express power you refer to.
Although one of two original trustees who are also beneficiaries can appoint assets to one or any of them it would be prudent to appoint an independent trustee who is not also beneficiary. Some wills require that.
If the Will contains an express power to appoint a new trustee it must be strictly observed but, if not, s36(1) allows a trustee who refuses to act to be replaced. It would be wise to ask a refusing trustee to do so in writing, giving them a reasonable time within which to reply or be treated as having refused by default.
For what it’s worth, my ACTAPS colleagues have always expressed this to me in stronger terms than @jack’s answer - namely that renouncing as executor definitely does not, by itself, renounce the trusteeship of a trust contained in the will.
Thanks for your replies - very helpful. However, it’s also rather concerning. The large majority of Wills that I’ve seen “appoint A and B as executors and trustees of this my Will”. Renunciation of an appointment is common, and I would assume that most people use the Government issued PA15 form.
However, that form simply renounces the appointment as executor, not the trusteeship, and there are no notes on the form warning about this.
If what you say is correct (and I’ve no doubt it is) there may therefore be thousands of people who have renounced probate, assumed that’s the end of the matter and have had no further involvement with the estate, but in fact are legally still trustees, with all the responsibilities and liabilities that attach to that position.
A trustee only incurs the responsibilities and liabilities of office if he or she or it (if corporate) accepts office by acting; so if a person appointed does nothing at all they are not so burdened and no one can force them to act.
It is however a problem for the other trustees as usually trustees must act unanimously. Hence the need often to remove them. Until removed they are in theory free to accept office at any later date because, as you say, they would otherwise remain legally appointed.
Such a trustee would normally be content to be replaced because to the outside world they are still apparently a trustee and no one knows they have not accepted office. Furthermore it may be contentious, in the absence of a rare formal disclaimer of office, whether a trustee has accepted office or not (and if so when) wrt to what they may or may not be alleged to have said and/or done that amounts to acceptance.
If no trustee will act the Court will appoint under s41 TA 1925 at the suit of a beneficiary.
What the great non-legally advised do after renouncing probate leaves me fresh out of sympathy other than a general infuriation that our legal system is sadly like the Ritz hotel open to all. I did not offer free advice on a regular basis as by retirement I had spent 53 years learning how to. Even if the Probate Service was prepared to offer advice on the law of succession or trusts (after you had waited a year to get it) what recourse would you have if they got it wrong? Whereas a professional would be negligent and in breach of good practice to delay excessively and would have PI cover
A person may disclaim an appointment as trustee under the terms of a Will “by conduct” if they have never accepted the appointment - and never taken any action in that role. There is a useful section in Underhill & Hayton on this.
A person cannot be forced to be a trustee of a trust, but once the role is accepted, it cannot simply be disclaimed.
An appointment by Will is different from an appointment as trustee by deed, as usually the person being appointed as trustee executes the deed and, by doing so, accepts the appointment.
I suspect that most people who renounce their executorship also intended to disclaim the appointment as trustee and, by conduct, have done so (saying “I don’t want anything to do with this…” or simply not responding to any correspondence about it). However, you the other trustees may want to be able to prove that that trustees has disclaimed and a deed to that effect is often desirable (as well as references in the recitals of supplemental trust documents). The other trustees will also want to be sure that the “disclaiming trustee” is actually aware of the trust and that they do not just assume that the trustee has disclaimed because they have not heard from that person about it.
There is a good, short section on this in Lewin on Trusts at 13-010 (20th ed). In summary renunciation of probate is conclusive evidence of implied disclaimer of the administrative trusts of a Will and mere evidence of implied disclaimer of any legacy or residue trusts. The longer a person fails to act in the Will trusts, the better the evidence of disclaimer. Best practice where there are continuing Will trusts is to disclaim (if desired) at the same time as renouncing probate.
Again, many thanks for the replies. But I remain concerned about the conflicting views, and the complete lack of certainty as to whether renouncing probate does actually have the effect of renouncing the trusteeship conferred by the Will.
It all seems to hinge on the evidence in individual cases, as set out in Tom Bradfield’s reference to Lewin. This is really not a satisfactory position, as I’m 100% sure that any executor (or at least a lay executor) who renounces probate assumes that they have thereby completely dissociated themselves from anything to do with the Will, when this may not actually be the case.
I appreciate that in the vast majority of cases this may not be of any practical importance, but this is the first time in 40 years of dealing with trusts that the question has even occurred to me, and in the case referred to in my original post I’m still not completely sure as to whether the trustees that renounced probate can actually still operate as trustees. Andrew Jones’s post would indicate that they can, but that from Tom Bradfield would indicate that they can’t, and it’s worrying that two knowledgeable and experienced practitioners can come to diametrically opposite conclusions.
Michael, the problem is that this is essentially about case law derived from basic principles of Equity. The key point you make is that you have not come across it before in 40 years of practice and nor did I in 53. This must surely mean that it rarely surfaces in a contentious form.
As lawyers, a fundamental part of our advice is to predict what judges will decide and this is largely informed by precedent. So it is not surprising that lawyers’ opinions will differ and perhaps the more so when there is a dearth of precedent or none at all.
My take on the contributions here is that you might well advise the renouncing executors to also formally disclaim their office of trusteeby a one page deed; but before that you will surely need to discuss with your clients who will actually become the new trustees and have ready an instrument of appointment which will be legally valid (as to the procedural requirements for making the appointment) and recites the deed of disclaimer. If the disclaiming trustees are the only ones appointed by the Will the timing of executions ideally needs to be finessed so that at all times, or only for a very short interval, the trust does not lack a trustee altogether for too long.
If the administration period is still running the trusts will be in suspense so if all can be done before it ends the executors who do prove can assent to the new trustees at a time when they will have already been duly appointed.
From a practical viewpoint, mindful that the renunciation of probate will be submitted to HMCTS along with the grant application, I advocate that if the executors do not intend to act as trustees they execute a separate disclaimer, for retention with the trust papers.
This avoids uncertainty and should be straight forward. If whoever takes the grant was not any of the executors they will have the power to appoint trustees (which might include themselves).
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals