Trustees are chosen because they can be relied on to make decisions. Yet illness, absence abroad or a loss of mental capacity can leave a trustee unable to act when a decision is due. Many people assume that a power of attorney solves the problem. In trust law it is not that simple.
This guide explains how powers of attorney interact with trustee duties in England and Wales, what a trustee can and cannot delegate, and what options exist when a trustee cannot act. It also covers pension schemes, where scheme documents and pensions legislation add further rules. Scotland and Northern Ireland have their own legislation, so the position there differs.
Can a Trustee Appoint an Attorney to Act for Them?
Sometimes, but only within limits. A trustee holds office personally. The role carries duties that generally cannot be handed to someone else, because the person who created the trust chose those individuals to exercise judgement.
There is a statutory exception. Under section 25 of the Trustee Act 1925, a trustee may use a power of attorney to delegate trustee functions for a limited period, which is currently up to 12 months. The attorney cannot be the only other trustee, unless that trustee is a trust corporation. The trustee who delegates also remains responsible for the acts of the attorney, as if they were the trustee’s own acts.
This route is designed for temporary situations, such as a trustee working overseas for several months. It is not intended to hand a trusteeship to someone else permanently.
Types of Authority Compared
Several different mechanisms are often confused with one another. The table below sets out how they differ.
| Mechanism | Who it involves | What it allows | Main limits |
| Trustee delegation by power of attorney (section 25) | A trustee and an appointed attorney | Temporary delegation of trustee functions | Time limited, not to a sole co-trustee, trustee remains responsible |
| Lasting power of attorney | An individual and their chosen attorneys | Decisions on the individual’s own property and affairs, or health and welfare | Does not make the attorney a trustee |
| Delegation to agents under the Trustee Act 2000 | The trustees collectively | Specific tasks such as investment management or administration | Trustees must select, supervise and review agents |
| Replacement or retirement of the trustee | Trustees and those with the power to appoint | A new trustee takes over the office | Must follow the trust document and the statutory process |
How Lasting Powers of Attorney Fit In
A lasting power of attorney, often called an LPA, is a legal document that lets an individual choose someone to make decisions for them if they lose capacity. It must be registered with the Office of the Public Guardian before it can be used. LPAs cover either property and financial affairs or health and welfare.
An LPA does not normally turn the attorney into a trustee. If a trustee loses mental capacity, the usual position is that they cannot continue to exercise their trustee functions, and their attorney cannot simply step into the role. The trust may need a replacement trustee instead.
There are narrow exceptions. Legislation allows an attorney to exercise certain trustee functions relating to land where the donor also has a beneficial interest in that land, such as a jointly owned family home. Attorneys may also have a role in the formal process of replacing a trustee who lacks capacity. Because these rules are technical, it is sensible to take legal advice before relying on them.
What Happens if a Trustee Loses Capacity?
A trustee who cannot make decisions cannot properly carry out the role, and trustees usually need to act together. Common steps include:
- Checking the trust deed or scheme rules for provisions on incapacity, removal or retirement.
- Identifying who holds the power to appoint a new trustee, which may be named in the document or set by statute.
- Appointing a replacement and, where needed, having the incapable trustee discharged through the correct process.
- Applying to the court if there is no one able to make the appointment, or if the position is disputed.
- Recording the decision and updating the trust’s records, bank mandates and, for pension schemes, the registration details held by the regulator.
Where a trust has only one or two trustees, the loss of one can leave the trust unable to function, so early planning matters.
Situations and Options
The table below summarises common situations and typical routes. It is a general guide and not a substitute for advice on a specific trust.
| Situation | Typical option | Points to check |
| Trustee abroad for a limited time | Section 25 power of attorney, or return to act | Notice requirements, duration and choice of attorney |
| Trustee temporarily ill but with capacity | Written delegation for specific tasks, or wait for recovery | Whether urgent decisions can wait |
| Trustee loses mental capacity | Replacement trustee, with court involvement if needed | Who holds the power of appointment |
| Trustee wishes to step down | Retirement and appointment of a successor | Remaining trustees must be able to act |
| Trustee has a conflict of interest | Independent trustee involvement or recusal | Scheme rules on how conflicts are managed |
Pension Trustees: Extra Rules to Consider
Pension scheme trustees follow trust law, but they also operate under pensions legislation, the scheme’s trust deed and the expectations of The Pensions Regulator. This changes the picture in several ways.
First, the scheme’s governing documents may restrict or prohibit delegation by power of attorney, and they usually set out how trustees are appointed, removed or replaced. Second, trustees of occupational pension schemes must generally be able to demonstrate knowledge and understanding of pensions law and the scheme documents. A person who cannot engage in decisions is unlikely to meet that expectation, even if an attorney could technically be named. Third, the regulator can suspend or remove trustees in certain circumstances, which is a further reason for schemes to plan for continuity.
It is also important to separate two different roles. A scheme member may appoint an attorney to deal with their own pension affairs, such as claiming benefits or giving instructions to the scheme administrator. That attorney acts for the member, not for the scheme, and does not exercise trustee powers.
Why Corporate Trustees Avoid Many of These Problems
A corporate pension trustee is a company appointed to act as trustee, rather than a group of individuals. If one director or employee of the corporate trustee becomes unavailable, the company itself continues as trustee and its internal arrangements deal with who acts on its behalf. This can improve continuity and reduce the need to change the trustee body when circumstances change.
An independent corporate pension trustee has no commercial link to the employer, which can also help when there are conflicts of interest. Professional pension trustee services and independent trustee services are often used where a scheme needs ongoing governance support, a sole trustee, or help during a wind-up. Pension trustee services for employers differ in scope, so the terms of appointment should be read carefully to understand who is acting, what decisions they will take and how continuity is handled.
The Role of Advisers
Advisers support trustees and employers, but they do not replace trustees and cannot exercise trustee powers unless they are appointed to that role.
- Pension scheme advisors and pension advisors usually give pension scheme advice on governance, scheme rules and succession planning.
- Pension investment advisors, retirement investment advisors and pension fund investment consultants focus on investment strategy and monitoring.
- A pension financial advisor or financial pension consultant often advises individuals on their own retirement planning, including whether to put a power of attorney in place.
- A corporate pension adviser, corporate pension scheme adviser or workplace pension adviser for employers helps a business review its arrangements, and an independent corporate pension adviser is not tied to one provider. Corporate pension advisory services may include checking that governance documents deal properly with delegation and succession.
Advice on trust law and powers of attorney is usually given by a solicitor. Firms giving regulated financial advice in the UK must be authorised by the Financial Conduct Authority, which can be checked on the FCA register.
Planning Ahead: A Practical Checklist
Trustees and employers can reduce the risk of being caught out by taking these steps:
- Read the trust deed or scheme rules to see what they say about delegation, incapacity and replacement.
- Confirm who holds the power to appoint and remove trustees.
- Keep a current list of trustees with contact details and any known periods of absence.
- Consider whether individual trustees should make their own LPAs for personal affairs.
- Make sure there are enough trustees for the scheme to function if one cannot act.
- Keep written records of any delegation, including dates, scope and the attorney’s details.
- Review arrangements regularly, especially after changes in the board or membership.
Conclusion
A power of attorney can help a trustee in limited ways, but it does not allow someone else to take over a trusteeship. Section 25 delegation is temporary, and an LPA generally deals with personal affairs rather than trustee office. Where a trustee can no longer act, replacement is usually the answer. For pension schemes, scheme rules, pensions legislation and regulatory expectations add further considerations. Planning ahead, using clear documentation and taking suitable legal advice help ensure that decisions can still be made when circumstances change.
Frequently Asked Questions
Does a lasting power of attorney make my attorney a trustee?
No. An LPA lets your attorney manage your own affairs. It does not automatically give them your trustee role, although there are narrow exceptions, such as certain land-related functions.
What happens if a trustee loses mental capacity?
The trustee generally cannot continue to act. The trust documents and statute set out how a replacement can be appointed, and a court application may be needed if there is no one able to make the appointment.
Can a pension trustee delegate their duties?
Pension trustees can delegate some tasks to agents, such as investment managers or administrators, but they remain responsible for choosing and monitoring them. Personal delegation of the trustee role is limited by trust law and the scheme documents.
How does a corporate pension trustee help with continuity?
A corporate trustee is a company, so the trusteeship continues even if an individual working for it becomes unavailable. This can reduce the disruption of changing trustees.
Who can advise on powers of attorney and trusteeship?
Solicitors advise on trust law and powers of attorney. Pension scheme advisors and independent corporate pension advisers can advise on scheme governance and succession arrangements, and regulated financial advice must come from an FCA-authorised firm.
Is the position the same in Scotland and Northern Ireland?
No. Scotland and Northern Ireland have separate legislation on trusts and powers of attorney, so trustees there should seek advice under the relevant law.