Breach of trust and fiduciary duty - tracing trust property

Grandmother (G) died in 2008. By her will, she appointed her son (S) as her executor. Her residuary estate consisted mostly of her £140,000 property and one or two bank accounts.

G left no specific or pecuniary legacies, but distributed her estate in three equal shares:

  • 1 share to S;
  • 1 share to her grandson (S’ son), (GS); and
  • 1 share to her 2 great-grandchildren (GGC)

S instructed solicitors to obtain a grant and on the sale of G’s property. S did not disclose the contents of the will to GGC.

The property was transferred to GS and his wife shortly after death.

GGC have only just now found out that they were named as beneficiaries and entitled to a 1/3 share of the estate.

Letters of claim have been issued against S for the usual - breach of trust/fiduciary duty and fraud. There is a clear case against S. S, however, informs us that he took an equity release loan on his property a couple of years ago and has no realisable assets.

Letters of claim have been sent also to GS and his wife, as it is claimed they conspired with S and knew, or ought to have known (being the son of S) that GGC were entitled to a share of the estate, deliberately concealing that fact from GGC (the relationship between GC and GGC is uncle/nephews).

Of course, GC has replied that he and his wife were bona fide purchasers for value and had no knowledge of the breach, or other terms of the will. A mortgage was taken out at the time of transfer for the remaining 2/3 value of the property. This was then paid to S. GC and his wife claim an equity’s darling and that limitation has expired in any event.

Is there any way to trace the property or reverse the conveyance so that the property is brought back into the estate without evidence that GC did, in fact, conspire or assist S in breaching his duties as trustee and fiduciary?

Chris

I do not claim any expertise in these circumstances, but in the absence of
any other response would offer some initial thoughts.
What has S done with the ill-gotten gains [sale proceeds of two-thirds of
property, subsequent equity-release funds?] If clear evidence to prove
blown on scarlet women etc could be difficult, but if any gifted to anyone
else [?GS and/or wife] any chance of reclaiming under insolvency
legislation? Same applies to any remaining funds - especially if S subject
to criminal proceedings [higher proof but longer limitation, and it sounds
as if he’s pretty much confessed].
How can GS claim no knowledge of will when property transferred not to him
but him and his wife, with mortgage on “remaining” two-thirds? What were
the conveyancers doing? Even if acting [theoretically] for mortgage lender
alone, why were they not alert to fraudulent claims/stamp duty scams etc?
Possibility of claim against them, or their insurers?
Good luck.

Kevin Mullen