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appointment and removal of trustees, Appointor; power of appointment, General, Trustee retirement, Trustees, Trusts

Can attorneys exercise powers of appointment?

In Godfrey v McCormick Nation J held that an attorney under an enduring power of attorney can not exercise powers of appointment even if held in a personal capacity.  This is inconvenient where there is incapacity.  While this will likely be addressed by the trustee appointment and removal provisions in the Trusts Act 2019 (following the 18 month transition period) the issue remains live and relevant.

For those who need to remove trustees now, the decision in Boston Trustees 3131 Limited v Chapman may assist.  In that case, which related to an application for vesting orders, no issue was taken with an incapacitated trustee being retained as a trustee “in name only” where no powers or discretions needed to be exercised.  See [4] where it was noted that:

” … From 14 February 2013 until 16 May 2019, Mrs Chapman and Boston Trustees continued as the trustees of the trust. Mr Tong says that unfortunately from about 2017 onwards it became clear that Mrs Chapman no longer had the mental capacity to discharge her responsibilities and perform her role as a trustee. However, as the trust did not enter into any transactions or conduct any business between 2017 and the present time, Mrs Chapman remained as a trustee. But, Mr Tong says that was “in name only” as Mrs Chapman was not required to do anything or to exercise any powers or discretions.”

Further, the exercise of powers of appointment by the incapacitated trustee’s attorney was not discredited by the court.

References:

 

Discussion

One thought on “Can attorneys exercise powers of appointment?

  1. Weird decision. Of course they can’t!

    Sent from my iPhone

    Posted by Henry Brandts-Giesen | August 11, 2019, 6:10 pm

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