The benefits of the new corporate trustee option for GAA clubs

The GAA (the ‘Association’) have recently introduced the option of the Corporate Trustee to act as trustee of clubs.

This article summarises some of the main points to consider for clubs considering the move towards corporate trusteeship:

In an effort to streamline the management of club property, the GAA have established a trust company (‘Iontaobhas Corparáideach Chumann Lúthchleas Gael Cuideachta Faoi Theorainn Ráthaíochta’) (‘the trust company’) as an alternative option for clubs to hold property through a corporate trustee, rather than the personal trustee system that has been the only trust system available for clubs to date.

What is a trustee?

A trustee is a natural person i.e., individuals appointed by a club, who are duty bound to act in the best interests of the club and the Association in dealing with the management and property of the club. Title to the club’s property is held in the individual names of those personal trustees. In the case of a corporate trustee, instead of individual members of the club, a sole corporate body or company holds the club property on trust, in almost exactly the same way as a personal trustee.

With the introduction of this corporate trustee system, GAA clubs now have several options:

1. Continue to hold trust property through the personal trustee
2. To adopt a system whereby club property is held by both a personal trustee and a corporate trustee
3. To elect to hold property through a corporate trustee alone

The administrative issues of the personal/individual trustee system

The personal or individual trustee system has conventionally been employed by GAA clubs for decades. It involves three or more natural persons acting as trustees over club property. In the past, that has led to difficulty and delay in the administration of the property of the club. For example, if one of the individual trustees dies or is otherwise unable to act, the club incurs both the additional legal cost and delay of having them removed and replaced, such as awaiting the issue of a grant of probate over the estate of the deceased trustee and so on.

In addition to this, if an individual trustee gets into financial difficulty, the club can be left vulnerable to a judgement being obtained over club property. All the individual trustees can be named on any such court proceedings issued or court order granted, when a third party successfully applies for a judgment. These issues are coupled with the considerable administrative burden on the exercise of one’s duties as an individual trustee of the club.

The benefits of corporate trusteeship

With this in mind, the GAA have established this trust company to act as trustee and manage club property for and on behalf of clubs. Property is held in the exact same manner as it would be by personal trustees and ownership of all club property remains with the club. However, clubs will enjoy the benefits of corporate trusteeship, whilst avoiding the administrative drawbacks that can arise with the individual trustee system.

The corporate trustee system cuts out any delay or additional cost associated with the removal, retirement or replacement of trustees, as the trustee is a body corporate, rather than a natural person. Correspondingly, the risk of any personal liability against an individual person e.g., a judgment, having any impact on the title of club property is eliminated.

The use of the trust company is recommended by the GAA. The decision to change to a corporate trust must however be approved at a general meeting by the members of the club. Once approved, the GAA advise that clubs engage a solicitor to ensure the correct documents are in order to enable the transfer of its assets to the corporate trustee. The GAA have also made grants of €1,000 available to facilitate this once the corporate trust is registered. The new corporate trust must be registered by the club and once the club has implemented this new corporate trust regime, it is anticipated that the legal costs of the club going forward, when dealing with the sale or purchase of club assets, should reduce.

Lavelle Partners are assisting a number of GAA clubs in moving from the individual trustee system towards the trusteeship of the trust company.

For further information regarding trusteeship over clubs or any of the above, please contact Lavelle Partners on (01) 644 5800 or by email to Senior Associate, Fiona Roche at fiona.roche@lavellepartners.ie.