22.2 Trustees: Appointment, Retirement and Removal
Key Takeaways
- A minor cannot be a trustee of land; Trustee Act 1925 s.34 caps trustees of land at four; a sole individual cannot give a good Law of Property Act 1925 s.27 receipt for capital money.
- New trustees are usually appointed under Trustee Act 1925 s.36; the court uses s.41; absolutely entitled adult beneficiaries may direct appointment or retirement under TOLATA s.19 if no appointor is nominated in the instrument.
- Trustee Act 1925 s.36 allows new trustees to be appointed in writing where a trustee has died, has remained out of the UK for more than twelve months, wishes to be discharged, refuses or is unfit to act, is incapable of acting, or is a minor.
- Bankruptcy does not automatically disqualify a private trustee; it is a classic instance of unfitness founding replacement under s.36 or removal by the court.
Once a trust exists, someone has to hold the legal title and exercise powers. FLK2 groups that office under four headings: who can be a trustee; appointment, removal and retirement; the duty of care; the duty to invest and investment powers; and the statutory powers of maintenance and advancement. This independent OpenExamPrep section is England and Wales law for SQE1 assessments from 1 September 2026. It is not SRA-approved text. Fiduciary loyalty is 22.1 Fiduciary Obligations and Liability of Strangers. Liability for getting these powers wrong is 22.4 Breach of Trust, Tracing and Equitable Remedies.
Who can be a trustee
Any person with legal capacity can be a trustee of pure personalty, including a company. A minor cannot hold a legal estate in land (Law of Property Act 1925 s.1(6)), so a minor cannot be a trustee of land. If a minor is named as trustee of personalty, they are liable to be replaced under Trustee Act 1925 (TA 1925) s.36 because of infancy.
For a trust of land, TA 1925 s.34 caps the number who can act at four. If more than four are appointed, the first four named who are able and willing act. There is no equivalent statutory cap for a trust of pure personalty, though a large body of trustees is clumsy. A trust corporation (including the Public Trustee, and a company that meets the statutory capital tests) can act as a sole trustee. That matters for overreaching: Law of Property Act 1925 s.27 requires capital money to be paid to at least two trustees or a trust corporation. A sole individual trustee cannot give a purchaser a good receipt for capital money arising under a trust of land. If the client wants a single professional trustee of a house, it needs to be a trust corporation, or a second trustee must be appointed before completion.
The settlor can be a trustee (self-declaration). A beneficiary can be a trustee, but then every sale to themselves is a self-dealing problem. Non-residence is not an automatic bar, but remaining out of the United Kingdom for more than twelve months is a ground for replacement under s.36. Bankruptcy does not automatically disqualify a private trustee the way it can disqualify a charity trustee; it is a classic case of unfitness for s.36 or court removal. Candidates are not required to know foreign-asset trusteeship.
Appointment
Original trustees are named by the settlor, or become trustees by self-declaration. Later appointment is usually under TA 1925 s.36, not a court application.
s.36 lets new trustees be appointed in writing when a trustee has died, remains out of the UK for more than twelve months, desires to be discharged, refuses or is unfit to act, is incapable of acting, or is an infant. The person to appoint is, first, whoever the trust instrument nominates for that purpose; if there is no such person able and willing, the surviving or continuing trustees, or the personal representatives of the last surviving or continuing trustee. They may appoint a replacement and, within the four-trustee cap for land, additional trustees. s.36(6) deals with adding trustees when a sole individual trustee is in office.
The court appoints under TA 1925 s.41 when it is expedient to appoint a new trustee and it is inexpedient, difficult or impracticable to do it out of court — for example a sole trustee who has disappeared, or who is the defendant in a breach claim. The court's guide is the welfare of the beneficiaries.
Trusts of Land and Appointment of Trustees Act 1996 (TOLATA) ss.19–21 give beneficiaries a statutory direction right. If no person is nominated in the instrument to appoint new trustees, and the beneficiaries are of full age and capacity and (together) absolutely entitled, they may direct a trustee to retire and/or direct the appointment of a specified person. This is the living counterpart of Saunders v Vautier in 21.2 Beneficial Entitlement and Purpose Trusts: the absolute owners can choose who holds the legal title.
A deed of appointment or retirement containing a vesting declaration automatically vests most trust property in the new mix of trustees (TA 1925 s.40). Exceptions include registered stocks and shares (which still need the company's register or CREST) and some mortgages and leases that need a third party's consent. Advise the client that the deed is not enough for every asset.
Retirement and removal
A trustee may retire without a replacement under TA 1925 s.39 by deed, if at least two individual trustees or a trust corporation will remain, and if the co-trustees and any person nominated to appoint new trustees consent. Retirement with replacement is the ordinary s.36 route. The instrument may add an express power.
The court will remove a trustee when the welfare of the beneficiaries requires it (Letterstedt v Broers (1884) 9 App Cas 371). Open hostility that makes administration impossible can suffice; you do not have to prove dishonesty. s.41 and the court's inherent jurisdiction overlap. Beneficiaries who can use TOLATA s.19 do not need to sue.
| Mechanism | Who acts | Typical trigger | Land point |
|---|---|---|---|
| TA 1925 s.36 | Nominated appointor, otherwise continuing trustees or personal representatives | Death, 12 months abroad, wish to retire, refusal, unfitness, incapacity, infancy | Cannot take the acting body above four |
| TA 1925 s.39 | Retiring trustee by deed, with required consents | Clean retirement without replacement | Two individuals or a trust corporation must remain |
| TOLATA s.19 | Absolutely entitled adult beneficiaries | They want different trustees | Direction in writing; still watch the four-trustee cap |
| TA 1925 s.41 / inherent jurisdiction | The court | Expedient and impracticable out of court; Letterstedt welfare | Court can appoint up to the statutory maximum |
| Express power in the instrument | Whoever the deed names | As drafted | Instrument cannot validly authorize a sole individual to give a s.27 receipt |
A will of a registered freehold appoints five named individual friends as trustees. No trust corporation is involved. Who can act as trustee of the land?