Trustee retirement under LPA

A trustee and beneficiary (A) made a lasting power of attorney (P&FA) and then later lost capacity.

A second trustee (B) could remove and replace him but it would require the leave of the COP under s.36(9).

The Trust (in fact a SSAS) provides that a trustee can retire unilaterally by giving notice to his co-trustees.

If A lacks capacity to make the decision himself, could the attorneys under the LPA give notice to bring about his retirement on the basis this is a personal act rather than the exercise of a fiduciary power?

My gut says no but I cannot find anything definitive and it would save a lot of time/costs involved in a COP application. An appointment of trustees is a fiduciary act, and I suspect a retirement could be a breach of trust where it is carried out in the knowledge that the continuing trustees will carry out a breach of trust, but I have been unable to find anything that says a simple retirement is or isn’t a fiduciary act.

Andrew Goodman
Osborne Clarke LLP

Hi Andrew,

I don’t have an answer, however I’d ask the SASS trustees if they will accept an LPA. The trustees I use will not - Rowanmoor.

I’m told that pension schemes are not covered by the use of LPAs like yourself - I’ve not seen this any statutory regulation from either the pension regulator or the OPG.

Richard Bishop

Normally maybe. In this case we act for one trustee (B) and the other (A) lacks capacity.

Andrew Goodman
Osborne Clarke LLP

Would s.36 (9) Trustee Act 1925 apply?. This states that where a trustee who lacks capacity is also a beneficiary of the trust then it is necessary to make an application for that person’s removal to the Court of Protection.

Andre Davidson

I’ve assumed s.36(9) does apply (the trustee is the sole member of the scheme) therefore the default position is a s.36 removal with a CoP application. I was hoping somebody may be able to tell me that it could be avoided by the trustee’s attorneys giving notice to retire on his behalf.

Andrew Goodman
Osborne Clarke LLP