Trustee duties / solicitor as trustee / misappropriation

Trusts Discussion
1

Hi there.

Can anyone kindly clarify the responsibilities of a trustee who is also a solicitor?

The scenario is 3 trustees agreed to change a share owned of property without valid reason.

Trustee 1 owned 20% of a property and was left a life interest trust meaning the 80% share of the decreased would pass on later once trustee 1 dies.

However, trustee 1 got given another 20% of the deceased share, (trustee 1 now owns 40%) , so when they die only 60% goes to remainderman - not 80% of property.

Once the share change took place, trustee 2 and 3 retired and a solicitor took over as trustee to join trustee 1

My question is, ‘if’ the new trustee / solicitor notices that 20% was awarded to trustee 1 with no valid evidence / reason (before the new trustee took over ), do they have a duty to HAVE to address it and change it back…OR can they just ignore it and leave it to the remaindermen to challenge legally if they want to ?

I ask as i am in this situation, if this solicitor has to adress it then clearly it helps me not having to pursue legal action, but…if they can just ignore it…i of course have to take legal action as its misappropriation of propery shares.

Thanks for your help

2

Dear Derek

I strongly suggest you take (paid for) professional advice. You may wish to use this link to find a suitable, local adviser https://www.step.org/directory/members

This is not a forum for free advice for lay people (you could try the CAB for that) and no one can advise without seeing all the relevant documentation etc.

Sara

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3

Sara is right to say what she does and often and increasingly needs to because this Forum is not intended for lay people to obtain specific advice as opposed to general information. I hope you will not take that as unkind nor my observation that your question is tremendously difficult for a seasoned professional to understand. This is easily remedied in a one to one consultation. I did not expect my clients to know the law; they expected me to, of course. But at the outset only they would know the facts, and have any relevant documents, and our joint task would be to identify all the relevant facts and documents so I could provide my opinion on the law.

It is likely to be a help that there is a solicitor-trustee in place because a solicitor is likely to know the law, to have accepted office only on the basis that nothing improper had been done in the past, and will be bound by the SRA Code of Conduct SRA | Code of Conduct for Solicitors, RELs and RFLs | Solicitors Regulation Authority, breach of which can be desperately serious and costly. A reasonable expectation would be that a solicitor will not mess you or your solicitor about. When you are challenging a body of exclusively lay trustees they can be a nightmare and add to costs unnecessarily, which may or may not be recovered in full either from them or the trust fund. A solicitor is required to be totally upfront about costs, as far as possible.

You should be told what cost to expect from the initial consultation before you attend it. Unfortunately civil legal aid is a modern desert, so you will have to judge whether the quoted cost is worthwhile to find out in outline whether or not you have a case and what it might cost to pursue it (often much more difficult to estimate). You might find, if you are advised you have a case, that your solicitor just writing an initial letter to show you mean business will have a significant and prompt reaction and avoid your being fobbed off or ignored.

You do not even say what your interest is in this matter, and that will be key to what you can expect to achieve and how.

Jack harper

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4

Thank you Jack.

Appreciated.

Makes sense.

My interest is , dad died left me 80% of home. But stepmum (who owned 20%) stays in it until death (life interest trust ).

Step mum is trustee 1, trustee 2 and 3 were absolute advocates of stepmum, and ignored me.

1 year after dad died , trustee 2 and 3 retired and just before they did manically gave step mum 25% of the 80%, so I’m left with 60, not 80.

The new trustee (a solicitor) told me 60% goes to me when step mum dies. And no changes had been made to trust. However, changes have happened but all took place at the hands of former trustees. So new trustee / solicitor has been handed a trust holding 60%.

I have wrote to them asking where the 20% has gone and why , as its reduced, so i want assurance it was admistered correctly as shares have vanished aince dads death.

Wrote to solicitor January, no reply at all yet , will send reminder

5

Derek,

You have every right to check that the trustees exercised their powers lawfully under the trust deed. And that they did so by actively considering all the things they ought to have considered, and not any of the things they should not have considered, according to the law of trusts. You are entitled as a beneficiary to ask for information and copy documentation relating to the trust if you do not already have it. A retired trustee is not necessarily absolved from any misdeeds by them or on their watch. As I have said, the solicitor-trustee has the most to lose and not replying to your letter is not a good look.

The solicitor as co-trustee might have an “own interest conflict” if not yet in principle then if he does not co-operate. The deeply unpleasant SRA is nonetheless very keen to make solicitors to the line. If he does not get that without needing to be told he is in for a rude awakening. A trustee who is also a beneficiary may not realise her obligations as a trustee as distinct from her interests as a beneficiary. Contributors to this Forum often assert that a lay person in this precise type of situation has acted unreasonably and as if the trust property was their own. All it may need is for all this to be pointed out to them if they do not co-operate.

Do a reminder by all means but if that does not work a solicitor writing on your behalf could do the trick. Of course it might affect whatever relationship you have with your step-mum. Most houses are a valuable asset these days even though you will only benefit after her death. It is better to pre-empt action that might disadvantage if you can you than wait to challenge it until after it has happened. If it starts bad it often gets worse.

Jack Harper

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6

Jack,

I find that the responses to this somewhat facetious and misplaced inquiry are far too polite and I admire your diplomacy.

The Forum is not social media.

Peter

7

I admit to being extremely if not inappropriately harsh, apologies.

8

Peter,

I am operating at my extreme limits here! My reputation was as an anarchist, iconoclast, counter-insurgent, and generally miserable old curmudgeon, only taking on clients that I liked. Eschewing sports persons and entertainers, who either ignored my advice or synthesised it with that of others, but prepared to assist even very naughty people, who were genuinely remorseful, make their peace with HMRC.

I do feel sorry for those who ask questions on here where the complexity of the tax system disproportionately and exceptionally invades their financial space, like lay trustees unjustifiably tortured by the TRS. I would be happy to advise them pro bono but HM Judiciary (for it is they) in their (alleged) wisdom have decided that damages for professional negligence are not commensurate with the non-existent fee. The PI market has decided that even a person with a total no claims history must pay a ridiculous premium annually plus a run-off after retirement when all cover ceases. The AML system now means that I would have to be expensively regulated by an allegedly “professional” body or if not by the Fiscal Cheka itself, which has long been lying in wait for me to punish my disrespect for their incompetence and psychopathology. I have dolls of the Great and Good who lurk behind these Cartels into which I regularly stick pins at my leisure. I also self-indulgently get back at them by contributing on here at every opportunity. Though Vox in Rama clamans.

Jack Harper

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9

A cracking read Jack! When are you going to publish your first best seller?

Patrick Moroney

10

Brilliant response Jack. I see you are a real Poppet Master.

Prick them with the Esoteric wisdom of the Third Degree.

So mote it be.

11

Peter and Jack, thank you both for brightening an otherwise dull day. Peter, your comments are not at all harsh in my view. I have recently adopted the mantra that I am no longer a nice person to deal with as far too many loose acquaintances spend far too much time asking for advice and not expcting to pay for it. I am now officially a curmudgeonly old stuffed shirt!

12

Patrick and Mark

I haven’t written a book nor expect to but below is one of my past literary excursions, a spoof engagement letter. Well received though not of course settled in one tax Chambers. It will be apparent why I retired as perhaps the only tax adviser who was in practice before the Judicature Acts of 1873 and 1875. A true fiscalosaurus.

" Jack Harper & Co#

Dedicated to the pursuit of the impossible on behalf of the unreasonable within the timescale of the ludicrous.

Rules of Engagement

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a) Deadlines
b) Response Time (call the Fire Brigade)
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f) “Have you done it yet? The answer is always No (unless you actually have It in front of you)

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3 We do not go on courses, so we do not appreciate the management psychobabble and paranoia that is taught on them

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5 You are not our only client; we have lots of clients, which is why we are so good. We can do anything next but we cannot do everything next.

6 Clients with repetitive strain injury to the wrist and poor fiscal hygiene must be in a 12-step programme (not program) and in recovery

7 Our favoured method of dispute resolution is physical violence

8 You may need to do what people did before 1979 (before Thatcher). WAIT

9 Australians (sc. Strines) are especially welcome outside of an Ashes series (“G’day mate. Got your ducks in a row?”) but must not be shonky or flaming Galahs

10 We regard Queue-Jumping together with Copyright, Data Protection, Health and Safety, Equality and Diversity ( “But I’m a [here insert your chosen minority status]”), ESG, Wokery, AML SARs and KYC, TRS, GAAR and HMRC as the last refuge of scoundrels

11 Unlike the Big Boys we accept full personal responsibility for all the advice we give and we don’t try to disclaim it"

Jack Harper

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13

Thanks for the clarity Jack. Seen lots of other replies in here but was sad to see that effort into comedy was of more importance than my dead dads estate but hey at least you gave some clarity and i thank you for that.

14

I have a PhD in Gratuitous Offence, so am always at risk of upsetting someone, but none was here intended on my part. Advisers cannot be serious all of the time. My non-humorous earlier contributions and that of Sara are best advice: that you need specific professional assistance and this Forum is not and is not intended to be the place to obtain it. I was quite used to clients not liking my advice and it was their privilege to do so.

Jack Harper

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