Explainer series — how can I remove a trustee?

There may be a written trust deed which allows for a trustee's removal.

If there isn’t, then you will need to raise a court action to remove them from office.

Here we take a look here at the options.

Methods for trustee removal

There are three ways to remove a trustee —

• By following the provisions in the trust deed (if there are any)

• The court exercising its statutory power of removal

• The court exercising its common law power of removal
  

Let’s look at these in more detail.

Trust deed provisions

The starting point is to look at the trust deed's provisions.

The person who sets up the trust may reserve the power to remove the trustees. Alternatively, the beneficiaries, trustees or a third party in the trust deed may be able to do this.

If the trust deed doesn't allow for trustees' removal, it'll be necessary to obtain a court order to remove the trustee.

Court removal by statute

If the trust deed doesn't include the power to remove a trustee, someone — most likely a beneficiary or trustee — must apply to the court.

Under the Trusts (Scotland) Act 1921, any person with an interest in the trust estate (including trustees and beneficiaries) may apply to the Court of Session or the sheriff court to have a trustee removed if they —

• Become insane

• Become incapable of acting by reason of physical or mental disability

• Are continuously absent from the UK for a period of six months or more

• Have disappeared for a period of six months or more

In the case of insanity or incapacity the court has no discretion and, if proven, must remove the trustee.

The court can decide whether to remove the trustee in cases of continuous absence or disappearance.

The Scottish Law Commission has criticised the legal criteria for removal, saying they are outdated.

For example, the law on incapacity has significantly developed over the last few decades. And — thanks to advances in technology — not being in the UK now doesn’t stop a trustee from engaging in the trust administration and discharging their duties.

Therefore, the Scottish Law Commission has recommended instead that legislation should include definitions for "capable" and "incapable", and "traceable" and "untraceable”.

Court removal under common law

The Court of Session can remove a trustee through the exercise of the nobile officium (the noble office or duty of the Court of Session).

One or more of the trustees and/or the beneficiaries can apply; however, the court rarely exercises its power this way.

It tends to do so only if there is no other option available and it is satisfied not removing the trustee would likely "prejudice or obstruct the due execution of the trust purposes".

Some examples of reasons trustees have been removed this way include —

• Going abroad and ignoring correspondence

• Failing, or delaying, to deal with correspondence, including signing and returning trust documents which required a signature

The court will also usually remove someone if there is a conflict between their personal interests and their duties as a trustee.

We talked about these duties in more detail in this blog post and focused on remedies for breaching these duties in this article.

Insufficient grounds

However, the court will not remove a trustee merely because of —

• Minor irregularities or technical illegalities the trustee is responsible for

• Disagreement or disharmony between the trustees

• The trustee being insolvent, although this may be a persuasive factor when taken into consideration with other grounds

• All, or the majority of, the beneficiaries and/or the trustees seeking the trustee's removal. Again, this will be persuasive, but other grounds are needed as well

Each case will turn on its own facts, so it’s important to get advice early if you’re considering removing a trustee.

Plus, if you’re interested in finding out more about trusts, please get in touch and you can read more commentary on our news and views page.