Incomplete trust, the estate of Jill Jones
We recently acted for a client who for the purpose of this piece we will refer to as “Adam” in his later mother’s estate, “Jill Jones”.
Jill passed away and had made a Will approximately three years before she passed away. Under the terms of her will, her estate was left equally to her three children, one being Adam, and his brother “Jim” and “John”.
However, at the same time Jill made a separate life interest trust whereby she gifted her property (which was worth £300,000) to Adam. He was the sole beneficiary of the life interest property trust and this was because he had always lived at home and had cared for her in her later years. Her other sons were both successful and had lived away for many years.
This meant that had the trust been executed properly and registered with the Land Registry, it would not have passed under the terms of the will, but under the terms of the trust to Adam instead. The only assets therefore that were intended to pass under the will were Jill’s personal belongings and the savings and investments she had.
When Jill passed away, it became apparent that the trust had not actually been signed by all parties to the trust (Jill, the other trustee and Adam) and had not therefore been registered with the Land Registry.
The trust was therefore void and it meant that the property passed under the terms of the will meaning it would be split equally between Adam and his brothers. Adam’s brothers indicated they wanted the property to be sold and the proceeds divided as quickly as possible which meant Adam would be left effectively homeless and his share would not adequately provide for him to purchase another property – his age also meant it would be difficult for him to obtain a mortgage.
Enquiries were made of the solicitors who prepared the will and the trust document. It transpired that they had written to Jill requesting further ID documents before the trust could be signed and completed. Jill had not responded and the file was simply closed off after the will was signed – leaving the trust incomplete. The file showed this appeared to be an oversight and no further chaser letters were sent to Jill. No correspondence was sent to her advising on the implications of the trust being left incomplete.
This clearly was to Adam’s detriment and although Jill’s instructions were clear, they had not been properly dealt with. A successful professional negligence claim was made against the firm in this instance as the solicitors were under a duty to ensure that the trust was executed properly and that it was negligence Jill had not been advised the trust was incomplete.
The solicitors initially argued as Jill never responded to their letter, they assumed she did not want the trust to go ahead but this was rebutted as they failed to chase for instructions and warn of the consequences of the will being left incomplete.
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