Removing Trustees: a short guide

Posted on By Liz Skinner
worry,tax,concern

Trusts are created for different reasons and in many different ways. Trusts are also often used to provide for disabled people in estate planning and in will writing.

However, sometimes it is necessary to remove a trustee for the trust. This can be an individual or a Trust Corporation. A trustee may be lay, which means non-professional, or professional. If they are professional, they are likely to charge for carrying out their role. They can make decisions about the assets in the trust. Unless they are also the beneficiary of the trust, they have no right to enjoy or benefit from the property or assets in the trust. This could be when:

  • A trustee acts improperly;
  • A trustee wants to stand down;
  • A trustee loses mental capacity to carry out the role, or
  • The beneficiaries would prefer someone else to carry out the role.

Check the deed

The first thing to do is always check the trust deed, which will usually set out how trustees can step down, who can appoint new trustees and how.

Trustee wants to step down

If a trustee wants to step down and is capable of doing so, it is almost always necessary for a Deed of Retirement and Appointment to be executed. The trustee should follow the process as set out in the trust deed.

Trustee doesn’t want to stand down

When a trust deed allows trustees or other people to appoint trustees, they can simply remove a trustee in writing and appoint a new trustee in their place.[1] If it doesn’t, they can direct a trustee to do this in writing if:

  • all beneficiaries have mental capacity to make the decision to remove a trustee and wish to do so, and
  • are over 18[2].

The trustee must then follow this instruction.

If the above does not apply, then the court can remove a trustee where it is expedient to do so[3], such as when a trustee is insolvent or otherwise unfit to act. It can also remove a trustee to protect the interests of the beneficiaries or trust assets, for example if a trustee has been dishonest or made bankrupt.

Trustee loses mental capacity to act

A trustee without capacity to carry out the role is not automatically removed or replaced, and an attorney can only act in their place in limited circumstances.

The first question to ask is whether the trustee has a beneficial interest in the trust. A professional trustee is unlikely to have a beneficial interest. If they don’t have a beneficial interest, then another trustee can simply appoint a new trustee to act in their place in writing[4].  

If there aren’t any other trustees, and all of the beneficiary have mental capacity to do so and are 18 or older, they can appoint a new trustee[5].

However, if the beneficiaries aren’t able to do this, then they will need to make a court application[6] to facilitate the removal of the trustee and appoint a new one. The type of application will depend on the circumstances of the case.

If the trustee does have a beneficial interest in the trust, for example in a family trust or in the case of the ownership of property where the people that legally own the property also live in or receive rent or other benefit from the property, the situation can be simpler.

If the incapable trustee has a lasting power of attorney (LPA) for property and financial affairs or enduring power of attorney (EPA), and the property is being sold or let, the attorney can step into the role of trustee for that transaction[7]. They can appoint a second trustee if needed. If there is no attorney, then an application must be made to court[8]. Again, which court they apply to depends on the circumstances.

Holly Mieville-Hawkins TEP, Senior Associate Solicitor and Head of Mental Capacity at Michelmores

[1] s.36(1) Trustee Act 1925

[2] s.19 Trusts of Land and Appointment of Trustees Act

[3] s.41 Trustee Act 1925

[4] s.36(1) Trustee Act 1925

[5] s.20 Trusts of Land and Appointment of Trustees Act

[6] s.41 Trustee Act 1925 or s.18(j) Mental Capacity Act 2005

[7] s.1 Trustee Delegation Act 1999

[8] s.36(9) Trustee Act 1925 or s.54 Trustee Act 1925

Will disputes: how to contest a will

Posted on By Liz Skinner

An FT article in January 2024 blamed a ‘boom in asset prices’ and an increase in dementia for a surge in inheritance disputes reaching the Courts in England and Wales.

someone signing their last will and testament

This matched an earlier report, called the UK Inheritance Disputes Report 2022, published by IBB Law. It found that three in four people are likely to experience a will, inheritance, or probate dispute in their lifetime.

So, what causes will disputes, and how do you challenge a will?

Will disputes

Relatives might want to challenge a will for various reasons. They may feel they’ve been treated unfairly or that they’ve not received what they were promised. Often there’s a feeling of being entitled to inherit assets when someone, particularly a parent, dies.

Second marriages can cause will disputes too, when the children of the first marriage feel they’ve been treated less favourably in the will than the children of the second marriage.

There is also increased awareness about financial abuse of the elderly/vulnerable, whether that’s by a relative, friend or carer. Often this leads to will disputes, when family members find they’ve been unexpectedly cut out of someone’s will, in dubious circumstances.

Freedom of disposition

England, Wales and Northern Ireland have ‘freedom of disposition’, which means people are entitled to leave their assets, in their wills, to whoever they want. This compares with other jurisdictions, including Scotland and most European countries, where the law gives close relatives a fixed share of the estate.  

The only limit on the English freedom of disposition is something known as the 1975 Act. This allows you to bring a claim against someone’s estate if you were not left ‘reasonable’ provision in the person’s will. This claim is easier if you were married or in a registered partnership with the person who died. It can also be brought by other family members (usually children) or by anyone else who was financially dependent on the deceased.

The position is very different if someone dies without a will, known as being intestate. Here the law divides the estate between the deceased’s close family, prioritising the deceased’s spouse/registered partner and children. Otherwise, parents, siblings and cousins can potentially benefit.

How to challenge a will

There are, however, only a very limited number of grounds for challenging someone’s will and it is harder than you might think. ‘It’s not fair’ isn’t actually grounds for challenging a will.

If a 1975 Act claim isn’t possible, you can challenge a will if you believe that the person who wrote the will (the testator) didn’t have the mental capacity to do so. As the Mental Capacity Act 2005 contains an assumption of mental capacity, if you want to challenge a will on these grounds, you have to prove the testator didn’t have capacity.

An alternative challenge can be brought if the testator was being unduly influenced by someone else. This might be because they’d fallen under the influence of a carer or neighbour. The most common form of undue influence is between spouses and family members.

There are also formalities that a will must comply with, so you can bring a challenge if (for example) you think it wasn’t signed correctly. Again, you’ll have to find evidence to support your case.

You need legal advice on the process for challenging a will and evidence to support your challenge. The costs of a court application can be extremely high, and it can take years to get to court. You should see if you can discuss things between you and whoever is named as heirs in the will. Most will disputes are settled out of court.

How to avoid a challenge to your own will

The best way to avoid challenges to your own will is to a) tell your loved ones what you plan to put in your will, even if you fear it won’t be what they want to hear, and b) get a suitably qualified advisor to write it. Many will disputes arise because the person making the will didn’t let their family know what they were planning to put in their will or drafted their own will incorrectly.

Jo Summers TEP, Partner, Jurit Law