We have been given a probate where there is a NRBDT arising. The sole appointed executor and trustee was a bank. They have renounced in regards to both the probate and the trust (the deed of renunciation explicitly states both). The bank executed this deed of renunciation without appointing new trustees of the trust.
We can apply for LoA with will annexed by the surviving spouse as she is the residuary beneficiary. My question is who becomes trustee of the trust/who has the power to appoint trustees? No substitutes/replacements have been appointed. Only the first edition STEP Standard provisions are to apply as per the will.
I just wanted to get some opinions, as I know we can apply to the court but we are hoping that this would be a last resort!
Section 39(1) of the Trustee Act requires that at least two trustees or a trust corporation must remain in place for a retirement to be effective, so I would suggest that although the bankās renunciation as executor may well be be adequate, their retirement as trustees did not work, and they will need to execute a new deed appoiting replacement trustees.
I donāt know the answer to this but I imagine the question is whether the bank ever became a trustee in the first place if they renounce rather than retire.
Section 37 (1) (a) Trustee Act 1925 āā¦a trustee shall not be discharged from his trust unless there will be either a trust corporation or at least two persons to act as trustees to perform the trustā¦ā
I would ask the bankās trust department to make proposals to sort this out. You will need to be absolutely certain that the new trustees are properly appointed. If there is any question as to the validity of their appointment any disposition by the new trustees will be ineffective. Ineffective dispositions give rise to unexpected tax consequences with possible future penalties and interest. To be on the safe side I would seek counselās advice once you have the bankās proposals.
You may also wish to look carefully at the definition of the trustees in the Will if not already considered. For example, Butterworths Wills tend to include the following definition:
āIn my Will and any codicil to it, the expression āmy Trusteesā means (where the context requires) my personal representatives for the time being who lawfully act in the administration of my estate or the trustees for the time being.ā The administrators would therefore become trustees once letters of administration have been granted.
