I have a matter where testatrix died with a FLIT in her Will. The life tenant (LT) has borderline capacity and is physically very unwell.
If we have to apply to the court of protection to remove LT as a trustee, he is unlikely to survive long enough for an order to be made.
It’s a Kessler template with a clause that allows for an appointment to create any dispositive or administrative provisions exercisable by any person.
If the LT possesses mental capacity the consensus is for him to retire as trustee, but if he has lost capacity can a deed of retirement and appointment include a dispositive/administrative provision stating that an incapable trustee is treated as having died and not require COP application?
If the life tenant were to retire as trustee, would there be 2 trustees, or a trust corporation, remaining as trustee?
If so, does the life tenant have sufficient capacity to retire (which requires a significantly lower level than if they were to be party to the appointment of a replacement trustee)?
I suggest the power referred to is not intended to exclude the jurisdiction of the courts and, if the life tenant is without capacity, I don’t believe will avoid an application to the Court of Protection.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Subject to the terms of the trust, the other trustees could simply remove the incapacitated trustee under s.36(1) of the Trustee Act 1925. No need for the COP! See Underhill & Hayton at para.74.28.
Alexander Learmonth KC
It is not clear from the original question whether or not the life tenant has yet accepted the appointment of trustee. For example, if the life tenant lacked capacity at the outset, and the trust has not yet been set up, could one argue that they have not accepted the appointment and therefore do not need to be removed?