I have a case where the incapacitated trustee is one of 4 trustees, together with her children, of her late husband’s nil-rate band discretionary Will trust. In her mid-80s, she is in residential care with no prospect of returning home. This is supported by written medical evidence of incapacity.
The only asset of the NRB trust is a deed of debt whereby she has promised to pay the nil-rate sum (£200,000) to the NRB trustees on demand enforceable by the trustees at any time. That sum is represented by that amount of equity in the house which has plenty of value left to cover it.
The remaining trustees need to sell her unoccupied house to prevent its deterioration and to raise funds towards her residential care.
I see 2 possible, but mutually exclusive and contradictory, courses of action. One is her removal by the continuing trustees and their appointment of a replacement trustee relying on s36 Trustee Act 1925 if she is deemed not to have a beneficial interest in possession in the trust. Query: is she deemed to have such an interest which would bring s.36(9) and the Court of Protection into play or does the IOU hanging over her estate like a sword of Damocles (as envisaged in the trust wording) negate any inference of a beneficial interest in possession? She is registered as the sole proprietor with a Form A restriction on the title.
The children, her co-trustees, hold a Property & Finance LPA registered 7 years ago when she had capacity. As an alternative, would s.1 Trustee Delegation Act 1999 come into play on the basis she does have a beneficial interest in the land including its sale proceeds? This would enable one or more of her attorneys (the LPA powers are joint and several) to sell the house and give a valid receipt to a purchaser without recourse to the CoP.
I would appreciate any contributions on this even if they show I am barking up one or even two wrong trees.