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As part of our service at Harris Tate, we produce a range of legal articles that are published in various media, designed to alert our clients to legal developments that may affect them.

Our legal articles are written by lawyers and legal executives and discuss legal aspects relating to industries, businesses and individuals as well as focusing on everyday legal topics of interest.  These articles provide information to help educate our clients on different topics and current events in the law.  They may raise additional questions.  Please do not hesitate to contact us with your questions or to discuss your individual situation in more detail.

When should a trustee retire?

1 August 2015

Retirement should be a time when you reflect on fulfilling life’s achievements and dreams – not for constantly facing question marks.

For Trustees, the biggest dilemma can sometimes be when to retire. And it’s something that should be considered before it’s too late for Trustees to make that decision themselves.

Trustee succession is critical to the successful ongoing management of a Trust. Trustees should retire while they are willing and able, as once a Trustee is unable (or unwilling) to act, the Trust will be “frozen” until that Trustee has passed away. A Trustee could be in a position where they are unable to act for a significant period of time. 

Appointer succession is equally important where the Appointer of a Trust (usually the person who set up the Trust) is tasked with removing and appointing Trustees, as and when required. Appointer succession is similar to Trustee succession - if it is not addressed prior to the Appointer being unable (or unwilling) to act, the Trust can be “frozen” with no ability for the removal and appointment of Trustees. 

Where a Trust is “frozen”, Trust assets may be unable to be administered for the benefit of beneficiaries – often elderly settlors relying on those Trust assets to support the costs of residential care. 

Where a Trust has no Appointer and no ability for Trustees to be changed, a Court order is the only remedy – an unnecessary and expensive process. 

It is important to regularly review your Trustee and Appointer succession. Make a plan now before it is too late, seeking advice from an appropriately educated trust and succession lawyer. 

- Jess Holtom