The Duties of Departing Trustees
In the August 2011 edition of the STEP Journal, Natasha Kapp writes on the duties owed by a departing trustee to his or her successor. Kapp makes the following observations:
- The "fundamental duty of a trustee upon resignation or removal is to surrender the trust property under their control;"
- This duty encompasses a further duty to "cooperate fully and actively with the new trustee by making all relevant documents and correspondence available and to answer all reasonable questions";
- This duty is not satisfied by prior performance of such disclosure to the beneficiaries of the trust; the new trustee is entitled to "establish for themselves" what assets compose the trust;
- Failure to cooperate with the new trustee giving rise to the assistance of the Court could well attract full indemnity costs against the departing trustees; the beneficiaries ought not to be in any way penalized by the shortcomings of the departing trustees
In Ontario, removal of trustees is governed by s. 37 of the Trustee Act.
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