Guidance relating to Removing a Trustee and Incapacitated Trustees
When a Trustee loses mental capacity, they are unable to fulfil their responsibility to act in the best interests of the beneficiaries and protect the trust assets. This creates risks and difficulties for the other trustees and the beneficiaries. There are some important things to consider when choosing a Trustee at the outset and whether they are fit to continue acting after as a Trustee.
1. Suitability
You should think carefully about who will act as a Trustee at the outset and who will replace an outgoing Trustee. They must be suitable and capable to take on the role. It may not be appropriate to choose someone who is elderly, unwell, frequently travels or who has financial issues of their own. The process of removing a Trustee after they have been appointed can be difficult and costly.
2. Keep Under Review
The suitability of all Trustees should be reviewed regularly throughout the existence of a Trust. If a Trustee is unwell, is less capable of managing their own affairs or is experiencing financial issues, then the Trustees should consider whether it is appropriate for him or her to continue acting. The Trustees will need to agree and any changes to the Trustees must be recorded by Deed.
3. Trustee Losing Capacity
It is possible for the other Trustee to agree and remove an incapacitated Trustee by a Deed, but the Trustee must be replaced and it important to have someone suitable available to replace him or her. However, an application to Court will be required if:
- The Trustee who lacks capacity is also a beneficiary of the Trust; or
- There is a dispute about whether the Trustee lacks the capacity to act.
Any application to Court can be time-consuming and costly, which is why it is important to think carefully about the choice of Trustees at the outset and keep the suitability of Trustees under review.
What next steps should I take?
If you would like more information on removing Trustees or applying to the Court of Protection then please do not hesitate to get in touch with our experts in the Trusts team at Myerson on 0161 941 4000 or via email.
Our Solicitors are trained in dealing with vulnerable people or those who have conditions such as the early stages of Alzheimer’s.