Navigating the responsibilities of a trustee can be demanding, mentally and emotionally. As trustees age or experience cognitive changes, it may become necessary to evaluate whether they retain the mental capacity to continue in their role. In this blog, we will explore the essential aspects of capacity to retire as a trustee, the relevant legal framework, and key case law shaping these decisions in 2025.
The role of a trustee carries significant legal and financial responsibility. Trustees must be capable of understanding complex matters, making informed decisions, and acting in the best interests of the trust and its beneficiaries.
There may come a time when a trustee is no longer able to fulfil these duties—perhaps due to declining health, dementia, or other cognitive impairments. In such cases, it becomes vital to assess whether the individual has the capacity to make the decision to step down.
Legal Framework: Capacity and the Mental Capacity Act 2005
Under the Mental Capacity Act (MCA) 2005, mental capacity assessments are decision-specific. This means a person might have the capacity to make everyday decisions but not more complex ones - such as retiring as a trustee.
The MCA outlines a two-stage test:
Functional Test – Can the person:
Understand the information relevant to the decision?
Retain that information long enough to make the decision?
Use or weigh the information as part of the decision-making process?
Communicate their decision (by any means)?
Causative Test – Is the person's inability to make the decision due to an impairment of, or disturbance in the functioning of, the mind or brain?
Key Case Law: Setting the Standard
Two important legal cases provide guidance when assessing capacity:
A Local Authority v JB [2021] UKSC 52
This Supreme Court case highlights the importance of a structured, individualised assessment. The judgment clarified that capacity assessments must be tailored to the decision in question and that people should be supported to make decisions wherever possible.
Re Beaney (Deceased) [1978] 1 WLR 770
This case reinforces the principle that the more serious the consequences of a decision, the higher the threshold for understanding. Retiring as a trustee can have significant implications, so a more detailed understanding may be required compared to simpler decisions.
Best Practice for Assessing Capacity to Retire as a Trustee
When assessing a trustee's capacity to retire, it's vital to follow these steps:
Gather Relevant Information: Ensure there is documentation of any diagnosis or cognitive impairment that might affect decision-making ability.
Involve Relevant Parties: Engage family members, carers, and other professionals who can provide insights into the individual's capacity and decision-making abilities.
Document Thoroughly: Provide clear, detailed documentation showing how the conclusion was reached—based on the balance of probabilities. This helps protect all parties and supports the integrity of the process.
Assessing the capacity to retire as a trustee is a delicate process that requires a nuanced understanding of both legal principles and individual circumstances. It ensures the trustee is making an informed, voluntary decision, and that the trust remains well-managed and compliant with the law.
Need Help With a Trustee Capacity Assessment?
At Nellie Supports, we specialise in decision-specific capacity assessments, including retirement from trusteeship. Our assessments are clear, CPR-35 compliant, and tailored to meet the requirements of the courts.
For more information please visit our website or contact us
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