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GDL Law Notes GDL Equity and Trusts Notes

Administration Of Trusts Notes

Updated Administration Of Trusts Notes

GDL Equity and Trusts Notes

GDL Equity and Trusts

Approximately 631 pages

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  • Appointment and Removal of Trustees

    • matters to consider:

      • 1. capacity to be a trustee

      • 2. no. of trustees required

      • 3. appointment of trustees

      • 4. retirement + removal of trustees.

    • sources of rules:

      • 1. trust instrument: usually governs.

      • 2. Trustee Act 1925: provisions often adequate, but overruled by trust instrument.

    Capacity: anyone with capacity to hold property, but no children.

    • s20 LPA 1925: appointment of infant to be trustee in relation to any settlement void (even personal property).

    Number of trustees

    • maximum:

      • trust of personalty: no maximum (but in practice, hard to agree if too many).

      • trust of land: 4 (if more appointed, first 4 named willing/able act) – s34 Trustee Act 1925.

    • minimum: generally, only 1.

      • but: receipt of capital money from land: 2 trustees, unless sole trustee is trust corporation – s27(2) LPA; s14(2) Trustee Act 1925; ss18(1), 94, 95 Settled Land Act 1925.

    • no requirement to maintain same number: unless specified in trust instrument.

    Appointment of Trustees

    - First trustees:

    • 1. by trust instrument: usually appoints first trustees.

      • inter vivos trusts: trustees generally parties to deed (can declare trust + vest property).

    • 2. by person nominated in trust instrument: if no trustees named or none able/willing.

    • 3. by court: last resort – power: inherent jurisdiction / Judicial Trustees Act 1896 / Trustee Act 1925.

    • requirements: notice + acceptance (express/implied) needed – Robinson v Pett [1734].

      • trust by will: if appointed both executor + trustee, person can renounce executorship + take up trusteeship.

      • cannot disclaim after acceptance – Re Sharman’s WT [1942].

      • cannot make partial disclaimer.

        - Additional trustees: s36(6) Trustee Act 1925 – may be appointed as long as no. of trustees not > 4.

        - Replacement trustees:

    • s36(1) Trustee Act 1925: new trustees can be appointed if trustee (original or substituted): dead, out of UK for >12 months, desires discharge, refuses/unfit/unable to act, infant.

    • s37(1)(c) Trustee Act 1925: at least 2 trustees (or trust corporation) must remain in office (except where only 1 originally appointed + can give valid receipts for capital money).

    - Method of appointment of new trustees:

    • normal appointment: s36(1) Trustee Act 1925 - must be in writing (+ pref. by deed), by:

      • 1. person nominated by trust instrument (if any - rare). – s36(1)(a).

      • 2. surviving/continuing trustees or PR of last surviving/continuing trustee – s36(1)(b).

        • trustees appoint jointly: but trustee not competent/unwilling to act need not concur.

      • power cannot be delegated: Trustee Act 2000 s11(2)(c).

    • appointment by court: s41(1) Trustee Act 1925 – when appointment under s36 impracticable.

      • esp. to substitute incapable trustee: mental disorder (Mental Health Act 1983), bankrupt, corporation in liquidation/dissolved.

    Retirement of trustees

    • retirement without replacement: s39(1) Trustee Act 1925 – requires:

      • 2 trustees/trust corp. remaining.

      • declaration by deed: by retiring trustee.

      • consent by deed: by remaining trustees/person empowered to appoint.

    • retirement and replacement: s36(1) Trustee Act 1925 (see above).

    Removal of trustees: s36(1) Trustee Act 1925 (see above).

    Appointment/removal of trustees by direction of beneficiaries: s19 Trusts of Land and Appointment of Trustees Act 1996 – beneficiaries can direct trustee(s) to retire or to appoint specified person as trustee.

    • conditions – s19(1):

      • s19(1)(a): no person nominated by trust instrument to appoint trustees.

      • s19(1)(b): beneficiaries all sui juris + together absolutely entitled to trust property (all must agree).

        • cf. Saunders v Vautier dissolution: can apply in same situation.

    • must be in writing – s19(2).

    Vesting in New Trustees

    • s40 Trustee Act 1925: automatic vesting of trust property in new trustees appointed by deed.

    • exceptions – s40(4):

      • (a) land conveyed by mortgage for securing money subject to trust (except land conveyed on trust for securing debentures/debenture stock).

      • (b) land held under lease prohibiting assignment/disposition without license or consent (unless consent obtained or vesting declaration legally not a breach).

      • (c) share/stock/annuity/property only transferable in books kept by a company/other body or in manner directed by statute.

    • registration: point at which title passes in registered land.

    Trustees Joint Tenants of Trust Property

    • 1. right of survivorship applies.

    • 2. office + trust property devolve on survivors.

    • 3. new trustees: same powers/duties as original trustees.

    • 4. death of last trustee: property vests in his personal representatives until new appointment.

      Delegation by Trustees

    - General principle: trustee must act in person + not delegate.

    • principle: ...

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