Book review: A Practical Guide to the Transfer of Trusteeships – STEP – 3rd Ed

 In Book Reviews for Private Client practitioners, Trusts

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ISBN-10: 1787421139 Editors – Richard Williams TEP, Arabella Saker TEP and Toby Graham TEP

PurposeBook review

This book was first published in 2007 by STEP. It came about in order to try and produce a protocol on indemnities sought in connection with the transfer of trusteeships in different offshore legal jurisdictions, with precedents.

The Trust Law Committee had originally issued a consultation paper in 1999 entitled “The proper protection by liens, indemnities or otherwise of those who cease to be trustees” which had provided an analysis of the law in this area, especially regarding the equitable non-possessory lien and the steps an outgoing trustee might take to protect his position in relation to the reimbursement of properly incurred liabilities.

A response was issued by STEP in 2000 through its technical committee after consultation with James Kessler QC. This proposed a protocol be set out regarding what is an appropriate covenant to indemnify in normal cases, with standard precedents, so that considerable expense and delay could be saved on the retirement of trustees.

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Since the first edition, the book has been expanded to include several more different legal jurisdictions and has been updated to include recent changes in the law.

Content

The book contains chapters dealing with the background, detailed drafting commentary and practical guidance. It then moves on to chapters which each deal with different geographical jurisdictions. There are Appendices which in volume take up half the thickness of the tome setting out the precedents for each jurisdiction.

It is made clear that the book is addressing the requirements on a transfer of trusteeship of lifetime settlements and is not designed for the transfer of trusteeships of other types of trust such as Will trusts, charitable trusts, or pension trusts. In most of the jurisdictions, except England and Wales, the precedents are for a change of corporate trustee.

Structure & Layout

After an introduction there are chapters on English law trusts, statutory and express powers of retirement, removal and appointment, trustees’ lien, indemnities, inspection and transfer of trust documents, contentious cases and trustee indemnity insurance.

The next section has chapters dealing with the particular legal requirements of the Bahamas, Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, Hong Kong, the Isle of Man, Jersey, New Zealand, Singapore and the United States. The chapter on the USA concentrates on general tendencies with some focus on the trusteeship rules in the State of New York as all the States have their own differing laws. The differences between jurisdictions in the use of chains of indemnities is explained.

There are then chapters dealing with commentary on the model precedents, the approach used to them, their use and adapting them to suit other cases.

Finally, the Appendices contain precedents for the various jurisdictions except for the United States. (There the requirements may differ from state to state).

Tools

The book provides a starting point for the protocol to use when transferring a trusteeship or exporting a trust abroad. There is a template letter provided as to what documents should be handed over on a change of trusteeship which may be useful.

The precedents provide a suggested way forward which should hopefully be followed and accepted by other STEP practitioners. However, as the foreword points out, the book is not a substitute for taking expert local advice and may quickly become out of date as this is a fast developing area of the law.

Clarity & readability

As an older practitioner, who needs glasses to read anything now, I did find the font size used throughout the book a little on the small size. As the book is not enormous (448 pages) I think the publishers could have expanded it up a notch without making the volume too thick.

The two chapters on other countries I looked through as a sample, Bermuda and the Isle of Man, both proceeded by concentrating on pointing out where their laws differed from the UK and referred the reader to the Section numbers of the local legislation which contains the rules about appointment and retirement of trustees. In the case of Bermuda, the chapter helpfully set out an extract of the relevant Sections of the Bermudian Trustee Act 1975.

The book is quite succinct and readable even though it is dealing with a rather dry subject.

Relevance to practitioners

The book only deals with the transfer of trusteeships so the chapters on other countries do not deal with any other aspects of trust law in those countries. So it is limited in its scope.

The English law precedents are of a traditional rather than very modern style. They include a precedent where there is a change of trustees as a result of a direction from beneficiaries under Section 19 of the Trusts of Land and Appointment of Trustees Act 1996.

In general there are several precedents provided for each jurisdiction covering different situations such as where a sole corporate trustee retires and a new sole corporate trustee is appointed, or where only one trustee retires and another stays in office or where a trustee is removed by the protector and another appointed.

It may be a useful book for a larger trust department dealing with a number of trusts with off shore aspects.

You might also be interested in this Webinar

Registering Complex Estates & Trusts On To The Trust Registration Service

This webinar will be a live broadcast on 15 January 2018 – recordings available after this date

For more information and to book please visit LiPS Legal

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