Q&As
Section 36(9) of the Trustee Act 1925 provides: (9) Where a trustee lacks capacity to exercise their functions as trustee and is also entitled in possession to some beneficial interest in the trust property, no appointment of a new trustee in their place shall be made by virtue of paragraph (b) of subsection (1) of this section unless leave to make the appointment has been given by the Court of Protection. What does ‘entitled in possession to some beneficial interest in the trust property’ mean in this context? In particular, does it include a beneficiary under a discretionary trust?
Published on: 29 October 2019
An entitlement in possession comprises a present right to present enjoyment, that is a vested and indefeasible interest in the net trust income (see Pearson v IRC). It does not include a beneficial interest that is defeasible or discretionary.
Section 36 of the Trustee Act 1925 (TA 1925) grants certain powers in relation to the appointment of a replacement trustee or trustees where a trustee dies, remains out of the UK for more than 12 months,
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