I have been given a document that purports to appoint a new trustee on a deed of appointment.
There are two original trustees, one has lost capacity and the other is her attorney. The attorney has signed for herself and for the other trustee as her attorney.
Firstly, I thought that an incapable trustee should be removed as they are not fit to act and secondly can someone sign for themselves and as attorney on the same deed. Is this a valid deed and has the new trustee actually been appointed.
Any authorities to assist me would be greatly appreciated.
On the basis that the power to appoint new trustees is vested in the trustees “as trustee”, I suggest that if such power is purported to be exercised by an attorney, the attorney must be acting under a power of attorney effective under s.25 Trustee Act 1925, or to which the Trustee Delegation Act 1999 (TDA) applies.
Even should the circumstances of the trust be such that s.1 TDA could apply, does the appointment and retirement of a trustee constitute the exercise of a “trustee function”? I am not confident that a change of trustees relates to land (as required by the TDA), rather than an administrative action in these circumstances.
When you say ‘attorney’ I assume you mean under a LPA/EPA not under a trustee power of attorney which would have ceased when the donor became incapable. You can’t exercise powers on behalf of an incapable trustee under an LPA/EPA. The correct procedure would be to replace the incapable trustee. If the incapable trustee does not have an IIP in the trust, you can do this by deed reciting the trustees’ incapacity. The deed you have is not valid.
On a separate point, if one trustee has given trustee power of attorney to another trustee, then the attorney can sign on both his own behalf and on behalf of the donor.
Blandy & Blandy LLP
I believe that this is exactly what is anticipated in s36(6A) Trustee Act 1925. The capable trustee can appoint an additional trustee on behalf of himself and the incapable trustee. That additional trustee and the first (capable) trustee can then remove the incapable trustee under s36(1).
By way of clarification of the original version of my post (and as I believe the other posters have pointed out), s36 does not require the capable trustee to sign “on behalf of” the incapable trustee.
The questions would be:-
- When you look at the precise wording of the deed, does it do something which is permissible (if it were executed by the right people)?
- Have the right people executed the deed (even if there are extra people unnecessarily executing it, such as the capable trustee executing “on behalf of” the incapable one)?
New Quadrant Partners
Thank you for your time in replying.