Trustee Powers UK (2026): Powers of Sale, Maintenance, Advancement, and Appointing New Trustees

Trustees derive authority from two sources: the trust instrument and the general law (statute and equity): (1) THE TRUST INSTRUMENT (EXPRESS POWERS): a properly drafted trust — whether created by a will (testamentary trust) or during the settlor's lifetime — should include comprehensive express powers. Well-drafted trust instruments include express powers to: (a) invest in any asset (wider than the TA 2000 general power); (b) lend trust money; (c) insure trust assets; (d) employ agents and pay their remuneration; (e) operate bank accounts; (f) apply income for beneficiaries' maintenance; (g) advance capital to beneficiaries; (h) give receipts that discharge third parties; (i) delegate functions; (2) STATUTORY POWERS — THE KEY STATUTES: where the trust instrument does not expressly deal with a particular matter, trustees fall back on statutory powers: (a) TRUSTEE ACT 1925 (TA 1925): provides core trustee powers including maintenance (s.31), advancement (s.32), and appointment of new trustees (s.36 and s.41); (b) TRUSTEE ACT 2000 (TA 2000): provides the general power of investment (s.3), power to acquire land (s.8), power to insure (s.34), and power to delegate (ss.11-23); (c) TRUSTS OF LAND AND APPOINTMENT OF TRUSTEES ACT 1996 (TLATA 1996): governs trusts of land — including the power of sale, the duty to consult beneficiaries, and the court's power to resolve disputes; (3) EQUITY: beyond statute, equity provides trustees with implied powers where they are needed for the proper administration of the trust. Courts have recognised implied powers to sell where it is necessary for the trust to function; (4) MODIFICATION BY TRUST INSTRUMENT: the trust instrument can EXTEND, RESTRICT, or MODIFY the statutory powers. Professionally drafted trusts routinely extend TA 1925 ss.31 and 32 to give wider discretion. The trust instrument can also EXCLUDE statutory powers entirely.

The power of maintenance under TA 1925 s.31 allows trustees to apply trust income for the maintenance, education, or benefit of a minor beneficiary: (1) WHAT SECTION 31 PROVIDES: where a minor (under 18) is entitled to income from a trust, the trustees have a discretionary power to apply that income for the minor's 'maintenance, education, or benefit'. The section applies where the minor has a vested or contingent interest in income; (2) THE CONDITION — CONTINGENT INTEREST: for s.31 to operate for a contingent interest, the gift must carry the intermediate income. Not all contingent gifts carry intermediate income — it depends on the nature of the gift and how the will is drafted; (3) SURPLUS INCOME: any income not applied for maintenance must be ACCUMULATED (added to capital) until the beneficiary turns 18 — at which point the accumulated income is paid to them. If the beneficiary dies before 18, the accumulated income falls back into residue (or passes under the terms of the trust); (4) AT 18 — VESTED INTEREST IN INCOME: when the beneficiary turns 18, s.31 terminates the maintenance power. From 18, the beneficiary is entitled to receive the income directly — even if the capital is still held on trust until a later date (e.g. 25); (5) MODIFICATION BY TRUST INSTRUMENT: many professionally drafted trusts EXTEND s.31 by: (a) allowing trustees to apply income for maintenance at any age, not just while the beneficiary is under 18; (b) removing the statutory requirement to accumulate surplus income; (c) widening the definition of 'benefit'; (6) WHAT COUNTS AS 'BENEFIT': courts have interpreted 'benefit' broadly — including: school fees; medical expenses; clothing; holidays; training; even accommodation costs. Trustees must document their reasoning and ensure the expenditure is genuinely for the beneficiary's benefit.

The power of advancement under TA 1925 s.32 allows trustees to pay or apply capital from the trust fund for the 'advancement or benefit' of a beneficiary who is not yet entitled to the capital outright: (1) WHAT SECTION 32 PROVIDES: trustees can advance up to one-half of the beneficiary's vested or presumptive share of capital at any time — without waiting for the distribution date. The advancement must be for the beneficiary's 'advancement or benefit'; (2) WHAT COUNTS AS 'ADVANCEMENT OR BENEFIT': the courts have interpreted this broadly — including: (a) purchasing a house for the beneficiary; (b) funding education or training; (c) funding a business start-up; (d) paying off debts; (e) making gifts for IHT planning purposes (if authorised — see below); (f) paying for a beneficiary's wedding; (3) THE ONE-HALF CAP (BEFORE TRUSTS ACT 2019 CHANGE): historically, s.32 limited advancement to ONE-HALF of the beneficiary's presumptive share. The Inheritance and Trustees' Powers Act 2014 removed the one-half cap — trustees can now advance the full share of capital (for trusts created or arising after 1 October 2014). Pre-2014 trusts remain subject to the old one-half limit unless the trust instrument expressly extends the power; (4) BRINGING INTO ACCOUNT: if the trust eventually distributes capital to the beneficiary, any prior advancements must be 'brought into account' — deducted from the final entitlement to avoid double benefit; (5) CONSENT OF PRIOR INTEREST: where another beneficiary has a prior interest in the trust (e.g. a life tenant), the trustees cannot advance capital to a remainderman without the prior beneficiary's WRITTEN CONSENT (TA 1925 s.32(1)(c)); (6) MODIFICATION BY TRUST INSTRUMENT: well-drafted trusts typically EXTEND s.32 to permit: (a) advancement of the whole (not just one-half) of the share; (b) advancement for a wider class of purposes; (c) advancement without needing to bring into account.

Trustees can be replaced or added during the life of a trust in several ways: (1) APPOINTMENT BY THE PERSONS ENTITLED TO APPOINT (TA 1925 s.36): the primary statutory power of appointment is in TA 1925 s.36. New trustees can be appointed by: (a) the person or persons nominated in the trust instrument as having the power to appoint trustees; (b) if no person is nominated — or the named person is unable or unwilling to act — by the surviving or continuing trustees; (c) by the personal representative of the last surviving trustee; (2) GROUNDS FOR APPOINTMENT OF A NEW TRUSTEE: a new trustee can be appointed when an existing trustee: (a) dies; (b) remains outside the UK for more than 12 months continuously; (c) becomes unfit to act (bankruptcy; criminal conviction); (d) becomes incapable (mental incapacity; illness); (e) wishes to retire (refuses to act); (f) is a corporation that has been dissolved; (3) APPOINTMENT BY THE BENEFICIARIES (TLATA 1996 s.19): where all beneficiaries are of full age (18+), are absolutely entitled to the trust assets (Saunders v Vautier principle), and are capacitous, they can DIRECT the trustees to retire and appoint new trustees of the beneficiaries' choice. The beneficiaries must give written notice; (4) COURT APPOINTMENT (TA 1925 s.41): the court can appoint a new trustee where it is 'expedient' to do so and it is 'inexpedient, difficult, or impracticable' to do so without the court's intervention. Common grounds: (a) trust deadlocked between co-trustees; (b) trustee lost capacity with no one entitled to appoint a replacement; (c) trustee in breach of trust who refuses to retire; (5) MINIMUM AND MAXIMUM TRUSTEES: for trusts of land, there must be at least TWO trustees (or a trust corporation) to give valid overreaching receipts for capital money (LPA 1925 s.27). There is no statutory maximum for trustees, but more than four is unusual and impractical. Charitable trusts may have larger boards; (6) VESTING OF TRUST PROPERTY: when new trustees are appointed, the trust property must be transferred into the names of all the current trustees. A Deed of Appointment (not a transfer) automatically vests most types of property in the new trustees (TA 1925 s.40) — but shares in a company require a stock transfer form, and registered land requires a TR1 to HMLR.

Where a trust holds land (residential or commercial property), the Trusts of Land and Appointment of Trustees Act 1996 (TLATA 1996) provides the governing framework: (1) POWER TO SELL (TLATA 1996 s.6): trustees of land have the power to sell the trust land — unless the trust instrument restricts sale. The power of sale is an implied power that does not need to be expressly granted. Trustees can: (a) sell the property to a third party on the open market; (b) sell to a beneficiary; (c) partition the property between beneficiaries; (2) POWER TO RETAIN — DUTY TO ACT IN BEST INTERESTS: despite the power of sale, trustees are not obliged to sell. They can retain property as an investment or for a beneficiary's occupation — subject to the standard investment criteria (TA 2000 s.4) where retention is an investment decision; (3) POWER TO PARTITION (TLATA 1996 s.7): where the trust has multiple beneficiaries with interests in specific shares, trustees can partition the land — allocating specific parts to specific beneficiaries in satisfaction of their interests; (4) DUTY TO CONSULT BENEFICIARIES (TLATA 1996 s.11): when exercising powers relating to land, trustees must CONSULT beneficiaries who are of full age, capacitous, and entitled to a beneficial interest. The trustees must give effect to the wishes of the majority (by value) of beneficiaries — so far as consistent with the general interests of the trust. This duty can be excluded by the trust instrument; (5) BENEFICIARY'S RIGHT TO OCCUPY (TLATA 1996 s.12): beneficiaries have a right to occupy trust land where: (a) the land is held for purposes that include occupation; (b) the beneficiary's interest is in possession (not future). Trustees can regulate or restrict occupation under s.13 — including imposing conditions or compensation payments to excluded beneficiaries; (6) COURT'S POWER ON APPLICATION (TLATA 1996 s.14): any person with an interest in trust land can apply to the court for an order. The court can make any order it thinks fit — including ordering sale, partition, or exclusion of occupation rights. When considering a sale order, the court balances: (a) the intentions of the trust; (b) the purposes for which the land was held; (c) the interests of creditors; (d) the welfare of minor beneficiaries occupying the land.