I have been instructed to deal with a change of trustees for a trust where the power to appoint new trustees is vested in the Settlor, but the Settlor has lost capacity. Will it be sufficient to rely on s36 Trustee Act clause 1(b) to enable the continuing trustees to exercise the statutory power of appointment (i.e. as there is no person nominated in the trust instrument able and willing to act - in this case due to incapacity), or is an application to the Court of Protection going to be needed, for the power to appoint new trustees to be exercised on the Settlor’s behalf?
Adie Pepperdine Ltd
I had this situation and we relied on an appointment under sec 36. In the deed of appointment I joined the Property & Finance attorneys of the settlor’s widow (who had power to appoint under the settlement) to confirm that she was unable to exercise the power to appoint by reason of incapacity. That was some 10 years ago and I was the new trustee so appointed and there hasn’t been any question as to the validity of my appointment.
If the Settlor also has a beneficial interest you will need an order from CoP (s36(9))
Hi Alison, a colleague of mine asked the same question a few years ago. In my view an application will need to be made to the Court of Protection to exercise its powers under s18(1)(j) of the Mental Capacity Act 2005, which states that: “the exercise of any power (including a power to consent) vested in P whether beneficially or as trustee or otherwise;”. In my colleague’s case, as if often the case with the C of P, the incapacitated person died before the order was made.
Graham & Rosen, Hull