The early signs of dementia can be subtle. Although dementia can occur at any age, it is far more common amongst the older demographic.
Accordingly, while lawyers and accountants, and trustees generally are rarely mental health experts, it is important to say alive to the early signs of dementia so that risks can be identified and managed. This 2 Minute Trustee Success – Recognising mental incapacity provides some useful guidance regarding warning signs to consider.
The ongoing realities of trustees who succumb to dementia is highlighted once again in the case of Lipscombe v Lipscombe. In this case, the costs of which were met from the trust fund, orders were successfully obtained to vest the trust property in two of the trustees, the third having been removed (pursuant to a power of appointment) following his being certified as mentally incapable due to dementia for the purposes of the Protection of Personal and Property Rights Act 1988.
As a practical matter, where dementia is a reality it is useful to also consider the day to day practicalities – see 5 things you need to know if your partner is diagnosed with dementia
The practical difficulty is that there is no symmetry between the Protection of Personal and Property Rights Act, the Trustee Act and LINZ rules regarding who can authorise the transfer of property.
While not always a pleasant task, many applications for vesting orders under s 52 of the Trustee Act could be avoided if trustees were reviewed from time to time, either by themselves or their advisers to confirm sufficient on-going capacity. This would enable much succession to occur while trustees remained mentally competent to authorise transfers.
Addressing issues of competence in a measured fashion might also ensure that trustees do not require urgent court assistance so that the trustees can deal with trust property. See for example Wethey v Wethey  493 where the property needed to be dealt with urgently so that the trustees could meet the costs of a beneficiary’s care. While the matter may be able to be addressed by way of an originating application, given the essentially procedural nature of the application (Re Williams) the time can cost to achieve this (and the time over which there may be no functioning group of trustees) cannot be underestimated