State based legislation generally mandates that (subject to any provision to the contrary in the trust deed), if a trust is established with two or more trustees, a retiring trustee will not be discharged unless there remains either at least two trustees or a 'trustee corporation' (i.e. the public trustee or a trustee authorised by statute).
Generally the remaining 2 trustees can be 2 individuals or 2 companies or a combination of both.
This provision will apply if the trust deed contains a clause stating that the relevant Trusts Act applies – or a clause that states that any retirement and appointment of trustee is subject to the Trusts Act – unless the trust deed also expressly provides that a sole trustee may act.
If the trust deed does not say it is subject to the Trusts Act, but also does not expressly permit a sole trustee to act – there is arguably no issue, although our experience has been that a deed of variation that expressly provides that a sole trustee may act is beneficial as third parties such as banks have in the past insisted on this.
Although most recent trust deeds contain a clause over-riding this provision, not all deeds do – another example of the mantra ‘read the deed’.
The View Legal trust deed does address the above issue via the definition of ‘Subsequent Trustee Criteria’, which confirms that:
(a) a sole trustee may act; and
(b) a retiring trustee is fully discharged even where only one trustee remains after the retirement.