Can a beneficiary remove a Trustee?

Trustees play a crucial role in the administration of a Trust to ensure that the intentions of the person who set up the trust (the Settlor) are carried out for the benefit of those they wish to benefit from the trust (the Beneficiaries).

In some circumstances, Trustees may need to be removed, whether for practical purposes i.e. they are unable to carry our their role, or because they are not performing their duties correctly. Whilst beneficiaries do not have an automatic right to remove a Trustee without reason, there are certain routes that may allow for a Trustee to be removed provided certain circumstances apply.

The Trust Deed

Firstly, the beneficiary should review the Trust Deed. The Trust Deed itself may contain certain provisions to enable a Trustee to be removed, whether by the Settlor, the Beneficiaries or a co-trustee or trustees. However, where there are no expressed provision allowing for a Trustee to be removed, statutory provisions or case law may need to be relied upon.

Statutory Provisions

Under Section 36 Trustee Act 1925, a new trustee can be appointed where a trustee:

• has passed away;
• has been outside of the UK for more than 12 months;
• lacks capacity, whether due to mental incapacity or because they are under 18;
• is bankrupt; or
• is otherwise unwilling to act and wishes to be discharged from their duties.

This statutory provision is usually exercised by the remaining trustees, but the beneficiaries could request that this power be exercised if these circumstances arise. This power must be exercised in writing.

Alternatively, where the Trust Deed contains no provisions to allow for removal, and the Trustee refuses to retire voluntarily, beneficiaries may apply to the Court for removal of the Trustee under Section 41 Trustee Act 1925. The Courts will look to prioritise the effective administration of the trust, and may order removal where a trustee’s conduct jeopardies this.

In some cases, the beneficiaries may be able to act together under the rule in Saunders v Vautier [1841]. Provided all beneficiaries are adults, have capacity and are entitled to the trust assets, they may may bring the Trust to an end and transfer the assets to themselves. Whilst it does not technically remove the trustee, it is a practical solution where the trust is no longer needed.

How can we help?

If you are a beneficiary that is concerned about a trustee’s behaviour and/or conduct, it is essential that you obtain legal advice so to prevent your interest being jeopardised. Our specialist team have experience in advising on Trusts and can review the Trustee Deed and advise you of your rights.

If you would like to discuss Wills, Probate or Estate Planning and how we may be able to help, please give our friendly team a call on 0116 212 1000 or 01858 445 480 or complete our Contact Us form.