The rules for challenging trustees or removing them from their positons are essential to the protection of the welfare of beneficiaries and the quality of trust administration.
Breach of Trust
Where a trustee makes a decision that the beneficiary considers is improper, the trustee may be liable for breach of trust.
Breach of trust is an act (or a failure to act) by a trustee that is not authorised either by the trust document or by law. For example, a breach of trust can occur if a trustee:
- Distributes trust assets to a beneficiary who is not entitled to them under the terms of the trust document.
- Invests the trust fund in a way not permitted by his express or statutory powers of investment.
- Breaches a fiduciary duty such as the duty not to profit from the trust, for example, by selling one of his own assets to the trust.
- Breaches the common law or statutory duty of care, for example, by exercising a power of investment without exercising such skill and care as is reasonable in the circumstances.
The remedies available to a beneficiary include, but are not limited to:
- Compensation
- Voiding any transactions from the breach, for example, transfer of property
- Removal of the trustee(s)
Removal of Trustee(s)
Often as a last resort, the court will intervene to remove a Trustee to their position if they are not acting appropriately.
There are various ways in which a trustee may be removed and so it is important to ensure the correct procures are followed when making any such application.
If you:
(i) believe a trustee’s actions or decisions are improper; or
(ii) are a trustee and are unsure about what decision to make or are facing criticism from someone;
please click here to speak to one of our experts.
