Trusts are meant to provide security and clarity for families, but when a trustee becomes incapable, moves abroad, or simply isn’t able to fulfil their duties, things can get complicated. If you’re a trustee, beneficiary, or family member facing the challenge of removing or replacing a trustee, understanding Section 36(1) of the Trustee Act 1925 is essential. This guide aims to demystify the process, address common worries, and offer practical steps for real-life situations.

What Does Section 36(1) Actually Say?

Section 36(1) of the Trustee Act 1925 gives certain people the power to appoint a new trustee in place of one who is incapable of acting, has died, or has been absent from the UK for more than twelve months. It’s not a general power to remove a trustee for any reason—rather, it’s a solution for specific problems that can disrupt the management of a trust.

For example, if a trustee loses mental capacity, passes away, or moves abroad for a continuous period exceeding twelve months, the remaining trustees or other authorised persons can appoint a replacement. This keeps the trust running smoothly and protects the interests of beneficiaries.

Who Can Remove or Replace a Trustee?

The power to appoint a new trustee under s36(1) usually lies with the person nominated in the trust deed, or, if there’s no such person, with the surviving or continuing trustees. If there are no continuing trustees, the personal representatives of the last surviving trustee can act.

It’s important to check the trust deed first. Some deeds include specific powers to remove trustees, which can make the process easier. If the deed is silent, s36(1) provides a fallback.

Common Scenarios Where Section 36(1) Applies

Let’s look at a few real-life examples:

• Loss of Capacity:
  Margaret is one of three trustees for a family trust. She suffers a stroke and is no longer able to make decisions. The other two trustees, after confirming her incapacity, use s36(1) to appoint a new trustee in her place.

  
  

• Death of a Trustee:
  John, a trustee, passes away. The surviving trustees need to appoint someone new to keep the trust functioning. Section 36(1) allows them to do this without waiting for lengthy legal proceedings.

  
  

• Absence from the UK:
  David moves to Australia for work and remains outside the UK for more than twelve months. The other trustees can replace him under s36(1), but only if his absence is continuous. Even a short trip back to the UK breaks the twelve-month period, as confirmed in Re Walker [1910] 1 Ch 259.

Misconceptions and Common Mistakes

Many people believe trustees can be removed for any reason, or that all trustees must agree to a replacement. In reality, s36(1) is limited to incapacity, death, or prolonged absence. If you want broader powers, the trust deed must include them.

Another common mistake is misunderstanding the “absence from the UK” rule. The twelve-month period must be unbroken—any return to the UK, even briefly, resets the clock. This can catch families out if a trustee travels back for holidays or business.

Some think a trustee’s agreement is needed for removal. In fact, s36(1) can be exercised regardless of the trustee’s wishes, as long as the legal requirements are met (see Re Stoneham’s Settlement [1953] Ch 59).

Practical Steps for Removing or Replacing a Trustee

1. Check the Trust Deed:
   Before doing anything, read the trust deed carefully. Look for any clauses about removing or appointing trustees. If the deed gives specific powers, follow those instructions.

   
   

2. Confirm the Grounds for Removal:
   Make sure the trustee is incapable, has died, or has been absent from the UK for more than twelve months. Gather evidence if needed—medical reports for incapacity, death certificate, or travel records.

   
   

3. Decide Who Will Appoint the New Trustee:
   If the deed names someone, they should act. If not, the continuing trustees or personal representatives of the last surviving trustee can make the appointment.

   
   

4. Prepare a Deed of Appointment:
   This legal document records the removal and replacement. It should be signed by those with the power to appoint and include details of the outgoing and incoming trustees.

   
   

5. Register the Change (if needed):
   If the trust holds land, you’ll need to update the Land Registry. Send the deed of appointment and any supporting documents.

   
   

6. Notify Beneficiaries and Other Trustees:
   Good communication helps avoid misunderstandings. Let everyone know about the change and provide copies of relevant documents.

Workarounds for Difficult Situations

If the trust deed doesn’t give enough power, or if there’s disagreement among trustees, you may need to apply to the court for directions. The court has inherent jurisdiction to remove a trustee if their continued involvement would prevent the trust from being properly managed (see Letterstedt v Broers (1884) 9 App Cas 371).

If a trustee is unresponsive or refuses to cooperate, document your attempts to contact them. This can help if you need to show the court that removal is justified.

For trusts with only one trustee, or where all trustees are incapable or absent, the court or the personal representatives of the last trustee may need to step in.

Case Law: Making It Real

• Re Walker [1910] 1 Ch 259:
  Clarified that the twelve-month absence must be continuous. Even a short return to the UK breaks the period.

• Re Stoneham’s Settlement [1953] Ch 59:
  Confirmed that a trustee’s agreement isn’t needed for removal under s36(1).

• Letterstedt v Broers (1884) 9 App Cas 371:
  Set out the court’s power to remove a trustee if it’s in the best interests of the trust.

Tips for Families and Trustees

• Keep clear records of all trustee appointments and removals.

• Communicate openly with beneficiaries to avoid suspicion or confusion.

• If in doubt, seek clarification from the probate registry or court.

• Consider updating the trust deed to include clear removal powers for future flexibility.

Conclusion

Removing or replacing a trustee under Section 36(1) Trustee Act 1925 is a practical solution for families facing incapacity, death, or long-term absence. By understanding the rules, checking the trust deed, and following the right steps, you can keep your trust running smoothly and protect everyone’s interests. If you encounter obstacles, remember that the law provides workarounds, and the court can step in if needed.

Disclaimer:
This article is for general information only and does not constitute legal, financial, or tax advice. You should consider your own circumstances and seek professional support if you need specific guidance. Requirements and procedures may change.