KembaraXtra - Legal Terms - Settled Land Act Trustees (Trustees of the Settlement)

Settled Land Act trustees, also known as trustees of the settlement, were the trustees appointed under a settlement created pursuant to the Settled Land Act 1925. They consisted of at least two individuals or a trust corporation, such as a bank. Although they did not ordinarily manage the settled land itself, they performed important supervisory and administrative functions designed to protect the interests of all beneficiaries under the settlement.

Their principal responsibility was to receive and hold capital money generated by dealings with the settled land. When the tenant for life sold, exchanged, or otherwise disposed of the land, the purchase money was paid to the trustees rather than directly to the beneficiary. The trustees then held those proceeds upon the trusts declared by the settlement for the benefit of both present and future beneficiaries. In this way, the doctrine of overreaching protected purchasers while preserving equitable interests in the sale proceeds.

The trustees’ consent was also required before the immediate beneficiary could exercise certain important statutory powers. For example, consent was needed where the beneficiary wished to vary easements or other rights affecting neighbouring land that benefited the settled estate. Their role therefore provided an additional safeguard against transactions that might adversely affect the long-term interests of beneficiaries.

Normally, the trustees were appointed by the settlement instrument and identified in the vesting deed. If no trustees had been appointed, the Settled Land Act 1925 specified alternative methods of appointment. Trustees could include trustees with powers over other land in the settlement, trustees holding future powers of sale, persons appointed by fully entitled adult beneficiaries, or, where the settlement arose under a will, the deceased’s personal representatives. The court also possessed power to appoint trustees where necessary.

Although the system has largely disappeared following the introduction of trusts of land under TOLATA 1996, existing settlements continue to rely upon trustees of the settlement until they naturally terminate. Their historical role demonstrates the balance struck by the Settled Land Act between allowing the current beneficiary to deal freely with land while safeguarding the rights of future beneficiaries.