Retiring and Appointing Trustees

Retiring and Appointing Trustees – Reasons for changing Trustees

Trustees are originally appointed under the Will or Trust document that creates the Trust.  Sometimes, many years can pass from the creation of the Trust to the date when the Trustees are required to take up their role.  Likewise, many Trusts are designed to be able to last a long time.  The maximum length of a standard Discretionary Trust is indeed 125 years. That is a long time for anyone to be a Trustee! The process of Retiring and Appointing Trustees is important to get right, for the benefit of everyone concerned with the Trust.

So the need for change may simply be due to the genuine wish for a Trustee to ‘retire’ from the role due to the passage of time.

Other reasons for wishing to retire a Trustee:

• The beneficiaries wish for the control of the Trust to pass to other persons;
• The co-trustees wish to retire a co-trustee for ease of administering the Trust;
• Where a Trustee has not performed his/her functions reasonably;
• Where a professional Trustee is desired to be appointed in place of lay trustees for expertise or independence to be brought to the role;
• Where a lay trustee (or trustees) is preferred to the role in place of a professional Trustee in cases of simple trusts or in the attempt of saving cost.

Whatever the circumstance above, the usual approach even in contentious cases is to seek voluntary retirement of the Trustee.

Appointing Trustees

Most common types of Trust such as Discretionary Trusts or Interest-In-Possession Trusts have a general requirement for a minimum requirement of two Trustees.

New Trustees might be required to be appointed where an existing Trustee has retired or in cases where an existing Trustee has died or is no longer mentally capable of continuing to act as Trustee.

It is usually wise to seek consent of all primary beneficiaries to the Trust before a new Trustee is appointed.   Trust Management is greatly helped by good communication and transparency of acting.

As per the Retiring Trustee, a New Trustee is appointed under a Deed of Appointment of New Trustee (or it can be combined with the same Deed as the retirement of an outgoing Trustee).

New Trustees should consider carefully the position of any outgoing Trustee and the existing Trustees. Before you take up the role, consider all of those points mentioned above (regarding the Retiring Trustee) and take advice on the duties and responsibilities you are taking up.

Please see below our full set of Guidance Notes on all aspects of retiring and appointing Trustees.