Appointment and Retirement of Trustees

When a trustee is appointed or retires, certain actions need to be taken to ensure the trust property, along with all the duties and responsibilities, effectively transfer to the new and continuing trustees, enabling proper administration of the trust. As a retiring trustee you may also want to ensure that you are sufficiently indemnified for any losses caused by the continuing and new trustees going forward or that come to light in the future.

Appointment of new trustees – step by step:

• Review the trust deed: The trust deed, which is the legal document establishing the trust, should outline the procedure for appointing new trustees. It may specify any specific requirements or restrictions that need to be followed.
• Determine the method of appointment: The trust deed may provide various methods for appointing new trustees. Common methods include appointment by the existing trustees, appointment by the settlor (the person who created the trust), or appointment by the court.
• Obtain consent from the new trustee: Before appointing a new trustee, it is important to ensure their willingness to take on the role. The prospective trustee should be informed about the duties and responsibilities involved in being a trustee and should provide their consent in writing.
• Prepare a deed of appointment: A deed of appointment is a legal document that formalises the appointment of a new trustee. It should include the details of the trust, the names of the existing and new trustees, and any specific provisions or conditions related to the appointment. The deed of appointment should be prepared in accordance with the trust deed and legal requirements.
• Execute the deed of appointment: The deed of appointment must be signed and dated by all parties involved, including the existing trustees, the new trustee, and any required witnesses. The execution should follow the formalities specified in the trust deed and comply with the legal requirements.
• Notify relevant parties: Once the deed of appointment is executed, it is important to notify relevant parties about the new trustee’s appointment. This includes informing the beneficiaries of the trust, other trustees (if any), and any professional advisors involved in the trust administration.
• Update records and documentation: The trust’s records and documentation should be updated to reflect the appointment of the new trustee. This includes updating legal documents, financial accounts, and any registrations or filings with relevant authorities.

Retirement of trustees – step by step:

The specific actions may vary depending on the terms of the trust and any applicable laws or regulations, but these are general steps to consider:

• Review the trust deed: The trust deed should outline the procedure for trustee retirement or resignation. It may specify any specific requirements or provisions that need to be followed. Review the provisions regarding trustee succession or appointment of successor trustees.
• Notify other trustees and beneficiaries: The retiring trustee should inform the other trustees and the beneficiaries of their decision to retire. This allows for open communication and ensures that all relevant parties are aware of the upcoming changes.
• Review and update trust documentation: Review the trust documentation, including the trust deed, to determine if any changes or amendments are required due to the retirement of the trustee. Consider updating the trust deed to reflect the new trustee composition, if necessary.
• Appoint a successor trustee: Depending on the provisions outlined in the trust deed, a successor trustee may need to be appointed. The process for appointing a new trustee is typically outlined in the trust deed and may involve obtaining the consent of the new trustee and executing a deed of appointment.
• Transfer of trustee responsibilities and assets: The retiring trustee should work closely with the new trustee to facilitate a smooth transition. This involves transferring all relevant trustee responsibilities, such as asset management, record keeping and communication with beneficiaries. Ensure that the new trustee has access to all necessary trust documentation, financial accounts, and records.
• Update legal and administrative records: Notify relevant parties, such as banks, financial institutions and legal authorities, of the change in trustee. Update the trust’s legal and administrative records to reflect the retirement of the trustee and the appointment of the successor trustee.
• Obtain professional advice if necessary: Depending on the complexity of the trust and the specific circumstances, it may be advisable to seek legal or professional advice to ensure compliance with legal requirements and to facilitate a seamless transition.

It is important to note that the retiring trustee should act in accordance with their fiduciary duties and obligations until the transition is complete. Open communication and cooperation between the retiring trustee, the successor trustee and the beneficiaries are key to ensuring the continuity and proper administration of the trust.

Why choose Price Slater Gawne?

It is advisable to seek professional advice from a solicitor or legal expert experienced in trust matters to ensure that the appointment or retirement process is carried out correctly and in compliance with legal requirements.

If you would like to speak to a member of our specialist team, please contact 03333 058375 or email wealthprotection@psg-law.co.uk.