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Appointment, Removal and Retirement of Ts - Coggle Diagram
Appointment, Removal and Retirement of Ts
Who can be a T?
Most adults with mental capacity can be a T. A company can also be a T so long as authorised to do so via its constitutional documents.
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How can a T retire?
1. trust instrument may contain express power for Ts to retire, although this is unusual
s36(1) TA 1925 - this provision states that a retiring Ts must be replaced by the appointment of a new T. Who appoints the new T? A. person nominated in the trust instrument to exercise the s36 power, but if none B. the continuing Ts (retiring T can join in the appointment). Appointment must be in writing- but better to use deed as it automatically vests the trust property in continuing and new T.
s39 TA 1925 allows a T to retire without being replaced. Conditions: A. there will be two T or a trust corporation left, B. the T retires by deed and C. the other Ts consent by deed.
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removal of Ts
s36(1) TA allows you to replace a T if: 1. The T is dead, 2. remains outside UK for more than 12 months, 3. Desires to be discharged (retire), 4. is unfit to act, 5. is incapable of acting (eg physical or mental incapacity) 6. is a minor. The person nominated in the trust instrument to exercise s36 power effects the replacement. but if none the continuing Ts including a retiring T if they are willing to join the appointment; if all the Ts have died, PRs of last surviving T will effect the replacement. Must be in writing- deed is better as it automatically vests the trust property in the continuing and new Ts.
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s41 TA 1925- court will replace a T if it is expedient to do so and it is otherwise inexpedient, difficult or impractical to appoint without the court's assistance/ court makes appointment following application by Ts or Bs. Court will only replace a T if it is not in the best interests of the trust for them to continue- mere dislike of a T is insufficient.
s19 TLATA 1996 allows Bs to serve written direction on a T or Ts to retire and appoint the person (if any) specified in the direction. s19 does not apply if the trust instrument: excludes it, or nominates someone to appoint new Ts. s19 applies only if the Bs are of full age and capacity and taken together are absolutely entitled to the trust property. Following a valid written direction, the T must retire by deed if: A. reasonable arrangements have been made to protect their rights, B. after their retirement there will be 2 Ts or a trust corporation left; and C. another person is appointed to replace them or the continuing Ts consent by deed to their retirement.
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Death of a T?
if 2 or more Ts are appointed, they hold legal title as JTs so if one dies, legal title will devolve to surviving Ts. if only one surviving T left that T should be advised to appoint a replacement Ts under s36(1) TA 1925 to ensure the continuity of trust administration.