We have a situation concerning Trustees’ responsibilities.
We have a Life Interest Trust created by a non-resident and non-domiciled deceased Settlor with Guernsey trustees. The Life Tenant is UK resident and domiciled with her daughter (also UK resident and domiciled) as the remainderman. It is still a non-resident Trust but we do not believe that is necessarily relevant except that of course any legal action that may be taken by the beneficiaries would probably need to be under Guernsey law.
During the life of the Trust, the Trustees do not seem to have had regard for maintaining the spending power of trust income for the Life Tenant, nor for maintaining the spending power of the capital value of the settled assets (essentially equities) for the daughter. Both have reduced over the past 25 years when the markets have generally increased, and inflation has reduced the spending power.
We are aware of the Nat West case - Financial Ombudsman decision DRN9900365 - under which the Ombudsman found that the Trustees were not required to consider the FACTA consequences of their decisions, so not entirely similar to our case. However we wish to better understand whether the Trustees in our case should have been more diligent in their management of the Trust’s investments to maintain the spending power of Trust income for the Life Tenant, and the capital value of the Trust’s assets for the remainderman.
All views welcomed plus if one exists, references to relevant case law would be appreciated.