We have concluded a complex trust negligence claim against professional trustees who mismanaged a trust in favour of a child.
When our Client’s grandmother decided to leave her estate to her young granddaughter for tax reasons, Gran was advised by her solicitors to transfer her house and a field into a trust until such time as the granddaughter, H, “came of age”. Gran agreed and, trusting her solicitors, appointed them as trustees of the Trust (along with two family friends), administering it on behalf of H during her minority.
Gran survived for a number of years after the Trust was set up and continued to live in the house. At the same time, Gran let the field to a local farmer who paid rent regularly to Gran.
Gran sadly died before H came of age. H came to Slee Blackwell to get advice on the Trust. Following some brief enquiries, it was quickly realised that Gran had been living in the house – which belonged to the Trust – rent free. This was in breach of the terms of the Trust as the Trustees had an obligation to invest the Trust property and derive an income from it.
The same also applied to the field. Once the field was placed into the Trust, Gran no longer owned it and had no legal right to enter into a tenancy agreement or to retain rent from the farmer. Further investigations showed that other monies received into the Trust were also paid to Gran when she requested it, again, in breach of the terms of the Trust.
Our Professional Negligence team contacted the solicitors who had created the Trust and pointed out that they had failed in their duties as Trustees. After much discussion, the solicitors made an offer of compensation to conclude the matter – but only if the other trustees (the family friends) also agreed not to bring a legal claim against them.
With considerable difficulty, our professional negligence solicitors located the other trustees. One co-trustee had moved overseas and was no longer prepared to be involved, whilst the other had died. At this stage, our Private Client team became involved and assisted in preparing the relevant documents to appoint a new trustee to replace the family friends so that the breach of trust claim could be settled.
During this process, H “came of age” which meant that the Trust could finally be settled on her. Our Private Client department again assisted by unwinding the Trust and transferring the property into H’s name who decided to immediately sell.
Fortunately, a buyer for the house was found fairly quickly and, following discussions, the farmer agreed to purchase the field. At this stage, our Property department stepped in and helped H sell the property in quick order, releasing her Gran’s legacy to her.
Meanwhile, with the appointment of the new trustee in hand, the Professional Negligence team were finally able to provide the assurances that the solicitors required and therefore settle the claim for professional negligence claim against them
This case is a remarkable example of how, despite all the multi-disciplines involved, Slee Blackwell was able to provide a complete and satisfactory service to our client and ensure that H received the best legacy possible from her grandmother.