Removing a trustee in Guernsey: key considerations and upcoming changes to the law

Under the Trusts (Guernsey) Law 2007, a trustee of a Guernsey law trust can be removed or replaced by the Royal Court of Guernsey exercising its supervisory jurisdiction or through specific mechanisms set out in the trust instrument.

In this article, experts from our Dispute Resolution team in Guernsey outline how trustees can be removed or replaced, the key considerations for the Royal Court and the impact of upcoming amendments to Guernsey's trusts legislation.

This is the second article in our series covering key aspects of trusts law in Guernsey. Read our first insight on trustee blessing applications in Guernsey: Trustee blessing applications in Guernsey | Ogier

Removing a trustee through the Royal Court of Guernsey

The Royal Court of Guernsey has broad supervisory powers to make orders concerning trustees, including their removal and appointment. An application to remove a trustee in Guernsey is usually made under section 69 of the Trusts (Guernsey) Law 2007 (the Trusts Law) which sets the general supervisory powers of the Royal Court.

An application to the Royal Court will often arise following a breakdown in the relationship between the beneficiary or beneficiaries and the trustee. Court intervention may be necessary where, for example, the trustee is unwilling to resign voluntarily.

The main consideration for the Royal Court in deciding whether to exercise its jurisdiction to remove a trustee is the welfare of the beneficiaries and the proper administration of the trust. In terms of judicial guidance, the Royal Court is usually directed to the landmark 19th-century Privy Council decision in Letterstedt v Broers [1884] 9 App Cas 371 (Letterstedt). The key principles arising from the decision are:

• the primary test for removing a trustee is the welfare of the beneficiaries and the proper protection of the trust estate

• misconduct is not required and proof of fraud, deliberate dishonesty, or misconduct is not an absolute prerequisite for removal

• persistent friction, hostility or a breakdown in the relationship between the trustee and the beneficiaries that makes the continued administration of the trust impossible or detrimental may be sufficient grounds for removal

• courts will likely remove a trustee when acts or omissions endanger the trust property, show a lack of honesty or capacity, or make the trustee's continuation clearly detrimental to the trust

The Guernsey Court has specifically adopted the approach in Letterstedt when considering the merits of removing a trustee, including in X Trustees Limited v Y Trust Company Limited and Beneficary E [2019] GRC 017.

Upcoming amendments to Guernsey's Trusts Law

Since it came into force in March 2008, the Trusts Law has provided a comprehensive framework for Guernsey law trusts. In March 2026, the Committee for Economic Development proposed amendments to refine certain elements of the Trusts Law. These amendments were approved by the Guernsey States in May 2026, commentary on which you can find here: Guernsey trust law amendments: evolution, not revolution | Ogier

Legislative drafting to give effect to the amendments is now underway. Three of the proposed changes are particularly relevant to the removal of trustees:

Automatic removal of trustees lacking capacity

There is currently no provision in the Trusts Law for the automatic removal of a trustee due to mental incapacity or unfitness to act, which causes delay and expense should an application to the Royal Court be required. The amended Trusts Law will allow for the automatic removal of a trustee when they lack the necessary capacity.

Process following the death of a trustee

There will be useful amendments to the Trusts Law that provide greater certainty around the process following the death of a trustee.

Beneficiaries' rights to terminate a trust

Section 53(3) of the Trusts Law currently sets out the rights of the beneficiaries of a trust to require the trustees to terminate the trust and distribute the trust property among them. These rights are similar to those established under English law in Saunders v Vautier [1841] EWHCCh J 82.

In Rusnano Capital AG (In liquidation) v Molard International (PTC) Ltd and Others [2019] GRC011, the Royal Court held that section 53(3) applied even where there was an unexercised power to add further beneficiaries. This extended beyond the rule in Saunders v Vautier.

Section 53(3) will be amended so that it does not expand upon the scope of the rule in this way, hence 53(3) will only apply where the class of beneficiaries is closed (i.e., there is no power to add new beneficiaries). The beneficiaries can therefore demonstrate an absolute, vested and indefeasible interest in the trust property. This brings Guernsey law into line with English law on this point.

How Ogier can help

Ogier's Dispute Resolution team in Guernsey has extensive experience advising trustees, beneficiaries and other parties on contentious and non-contentious trust matters, including applications concerning the removal and replacement of trustees.

If you have any queries or need further assistance with any issues raised by this article, contact a member of the team.

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

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