Trust dispute solicitors

The first step is relatively simple, and it is just to ask the executor/trustee for the information, where there is no need for the involvement of the court. If the trustees agree to provide the information, then usually the beneficiary will meet the cost of copying and sending the documents. However, if the trustees refuse, then a beneficiary can consider making an application to the Chancery Division (Part 8 claim for under CPR 64). This is an application for the determination of a question arising in the execution of a trust.

Who pays the costs for the latter application is at the discretion of the court, and a costs order will usually reflect the outcome of the application, meaning it could be the beneficiary (if unsuccessful), or the trustees (if the court discloses that they acted unreasonably) that pays the costs. Alternatively, the costs could also be payable out of the trust if it is considered appropriate.

An application to remove or substitute an executor/trustee can be made before a Grant of Probate has been issued. It can also be made after but would then have to be made to the High Court under Section 50 of the Administration of Justice Act 1985.

A beneficiary who has concerns about the actions of a Trustee will need to show that they have ‘acted in breach of their powers and duties under the trust’. However, it is not often that the decisions of a trustee will be challenged. It is more probable for the decision-making process itself to be.

The grounds that a Trustee can be legally challenged in court are as follows:

• The step taken following the Trustees’ decision was outside the scope of the Trustees’ powers.
• The Trustees’ decision was within the scope of their power, but they have committed a breach of trust in failing to giver proper consideration to relevant matters.
• The act was within the scope of the Trustees’ powers but was exercised for a purpose, or an intention, which was outside of the power being exercised.
• The Trustees had a conflict of interest in making the decision in question.
• The act was a result of a mistake by the Trustees (mistake of law or fact)

Executors can be held both financially and legally responsible for any mistakes made, even if they are in error. An Executor is personally responsible. The same applies to Trustees.

For example, if an executor is to distribute an estate which has outstanding debts without knowing they existed, the outstanding creditor can still bring action against the executor.

Trustees can be removed by the following means:

• Exercise of an express power under a trust instrument
• Exercise of the power conferred under section 36 of the Trustee Act 1925
• Exercise of the court’s jurisdiction under section 41 of the Trustee Act 1925
• Exercise of the court’s inherent jurisdiction.
• Compulsory retirement pursuant to a beneficiaries’ discretion under the Trusts of Land and Appointment of Trustees Act 1996.
• Replacement of trustees who lack mental capacity pursuant to beneficiaries’ direction under section 20

It should be noted that the Court has powers to remove executors that are distinct from those in the removal of a trustee. The court may exceptionally pass over an executor to make a Grant of Letters of Administration with Will annexed to another person.

However, for the order to be made, it is necessary that, there are ‘special circumstances’ and those circumstances make it necessary or expedient to pass over the person entitled to the grant.