Problem with Will/Trustee - ** judge found in our favour **

[hyperjase]

Hi all,

 

I've been here for a while but really not sure where this should fit.

 

My step son was left some money in trust until he was 18. He turned 18 last August but following excuse after excuse about why it hasn't been given to him. They have claimed that the money was somehow left so that it would be paid out when my other step son turns 18 (next February).

 

We have a very strong, almost certain that the trustee has spent this money. This I am 99% sure of. They won't give my step son any details of the account or solicitor the will is with. I know this has nothing to do with me but he can surely as he is 18 now take control of this? They have promised him the money but as far as we were told it had been put in a high interest account so there should be a healthy chunk of gross interest on top of the £5,000 left for him (it was put in trust in mid 1998).

 

Where do we go with this? The relationship has completely broken down with the trustee and they won't give us any details. Needless to say we won't let this go, and will take legal action at the drop of a hat but need some advice on where to start and what to do.

 

Many thanks in advance.

[honeybee13]

Hello there.

 

I think the legal forum is the best place for this and will move your thread there for advice.

 

My best, HB

[honeybee13]

Hello again.

 

Are you saying the trust was set up via a will? And do you have copies of any of the original paperwork please?

 

HB

[steampowered]

I cannot say for certain without seeing the will, but it sounds very unlikely for money to be left in a way that means that both children have to be 18 before either can get their hands on it. In theory it is possible but can't think why anyone would set up their will in that way. Legally, the trustee is obliged to look after the money until your step son comes of age. It sounds like he has probably spent the money.

 

If relations have completely broken down then I think you are running out of options. I would start off with a "letter before action" asking the trustee to provide the money together with interest, or if he feels your stepson is not entitled then to explain why and provide a copy of the will within 21 days, else you will start a claim against him in the County Court for the money plus interest plus legal costs. CAG can help you come up with a draft letter if needed. The letter would have more weight coming from a solicitor but you will have to decide whether using a solicitor is worth it for 5k (if you do use a solicitor keep a tight control on legal costs, ask them to cap their fees for each stage of the dispute at a certain level).

[hyperjase]

Many thanks for the information.

 

We have had no paperwork, on request it has not been forthcoming and requests now are being ignored/declined. We were told all along, he would receive it on his 18th Birthday, mid August 2012. That came and then was promised it would be the end of October 2012. The final one was that it would be ready end of March this year. Their partner was sent this morning to tell us that they had "got the information wrong" and it wouldn't be released until his brother was 18 (Feb next year).

 

As far as I'm aware if it's left in trust until their 18, then it becomes theirs on their 18th birthday. I was also under the impression that the letter of the will is fully legal (meaning they can't withhold it or refuse him access to it).

 

Do you think going down the County Court route would be expensive? We are on a tight budget and can't afford solicitors left, right and centre. I'd rather do the groundwork myself. Would this go via the Small Claims Court? I've dealt with them before.

 

Thanks again for the advice, I will keep this updated with any further information that comes to light.

[Ell-enn]

Hi, have a look at your home insurance policy - you will more than likely have legal cover included in which case they will provide a solicitor to act for you in this matter.

 

Has your step son never seen a copy of the will? my sons were sent letters from a solicitor advising of their inheritance together with a copy of the will.

[hyperjase]

Thanks, but sadly we don't have home insurance. Neither of my step son's have ever sighted any paperwork, we have moved a few times but nothing has ever been seen, only ever told to us by the trustee. If they have spent the money (as we are almost certain) has any law been broken here? Is it classed as fraud?

 

Here is the letter I've drafted:

 

LETTER BEFORE ACTION

 

Following the disclosure of the information that my inheritance has further been delayed beyond the duly informed date of 20th August 2012, I hereby request the full amount with five year’s interest added. The account interest has never been disclosed and because I was under the age of 18, the interest rate was a gross amount. I therefore have assumed a 5% interest rate.

 

Total inheritance: £5000

Interest @ 5% over 5 years: £1250

 

Total amount now required: £6250

 

If the interest rate differs from the above rate, I require written evidence to show the yearly gross amount.

 

I hereby give you twenty one (21) days in which to respond to this request with how you intent to finalise this matter. Failure to do so will result in action being taken through the County Court to recover the above costs, plus court costs.

 

I await your reply.

 

Yours faithfully,

 

Is that correct for what we need to achieve?

[Ell-enn]

You can get a free 1 hour consulation at most solicitors - look in your local newspaper or on line - most do them in the evening, they would be able to tell you the best way forward and it will cost nothing.

[hyperjase]

To be honest, I'm doing this as I have a better understanding but my step son is at college and would be entitled to legal aid on this? He's not working as of yet...

[steampowered]

Using a solicitor is often helpful and adds more weight, but I don't think it is strictly necessary as long as you are sensible about things. The small claims limit is 10k so this would be a small claim. I would start by trying to get a copy of the will independently. You should be able to do this for a fee of £6 - see http://www.justice.gov.uk/courts/probate/copies-of-grants-wills and http://www.thisismoney.co.uk/money/experts/article-1694172/How-can-I-get-a-copy-of-a-will.html. This will put the matter beyond doubt.

 

I guess it is possible that they are telling the truth but it sounds unlikely. If the will says he is entitled to the money now I would write to the trustee attaching a copy of the will, so they know the game is up. You can then invite him to pay the money or contact you to reach an agreement about payment proposals within 14 days, otherwise you start small claims proceedings.

 

Bearing in mind the money he holds for your other son, it could be worth asking the court to remove him as executor and replace with an independent solicitor at the same time. The courts have jurisdiction to do this although it might mean a separate court application. If this is a route you want to go down I will check.

[steampowered]

Here is the letter I've drafted:

 

Is that correct for what we need to achieve?

 

I think your letter looks great. I would just add the following: "If you believe that I am not yet entitled to the money, then please provide an adequate explanation why not and a clear copy of the will to enable me to verify this. I currently believe that I was entitled to the money when I turned 18 so, unfortunately, I will have no choice but to take legal action if a proper explanation is not provided."

 

Obviously make the appropriate adjustments if you decide to try and get a copy of the will independently first.

[hyperjase]

Thanks, I'll add that to my draft letter -- I will be chasing a copy of the will for ourselves, so we can get the exact details prior to making the claim.

 

I'll update when I know more from the Will.

 

Many thanks all for your guidance and help, very much appreciated.

 

HJ

[assisted blonde]

Just to let you know if you dont already you can get a copy of the will from the probate service for a small fee

[honeybee13]

Just to let you know if you dont already you can get a copy of the will from the probate service for a small fee

 

I was about to say that very thing, AB.

 

HB

[hyperjase]

Just to let you know if you dont already you can get a copy of the will from the probate service for a small fee

 

That's my first job tomorrow, get the Will and then we know what to deal with.

 

Many thanks

[hyperjase]

I have managed to speak to the trustee, they were a little uneasy giving me details but I know now a little more.

 

For whatever reason they "messed up" and put the trustee's funds in another account (without the trustee's knowledge or authorisation) which was a higher interest rate. But that also means they cannot withdraw the amount in a prompt time scale. We are left with this issue, they can withdraw the original £5000 amount but NO interest will be paid out at that time, however when my other step-son turns 18 in February, he will get his plus interest - and was told "it was up to them what to do with the interest".

 

I'm thinking now this really should go to court as it needs to be looked at properly? Saying he will only get his £5000 isn't acceptable to me, what are your opinions on this?

 

Many thanks.

[honeybee13]

Hello there.

 

It doesn't sound very fair, does it? I thought trustees had a duty to invest money wisely on behalf of the beneficiaries.

 

I don't know if this would be covered under the terms of the will...

 

HB

[steampowered]

When the trustee says "they messed up", it is not clear to me who "they" is. I don't see how money can be moved without the trustee's knowledge or authorisation when he is the one who has to sign for it.

 

In theory it is possible that the money went into an account which does not allow withdrawals until February 2013 but in practice I do not see how this is possible. The trustee seems to be saying that, for example, he put the money into a 5-year fixed rate savings account four years ago which only pays interest if you hold the money for the full 5 years. This sounds believable. However, if true the money would have only been paid into this account back in 2008. Even when you take the interest penalty into account, the amount should be considerably greater than £5000 since it would have earned interest in a different account from 1998 to 2008. I have never heard of a 14-year fixed interest account lasting from 1998 to present so it sounds very unlikely that the base amount is £5000.

 

The trustee clearly does not have great attention to detail. Perhaps he is just being vague rather than trying to mislead you, and said £5000 when actually he meant something like you would get £6574.34 instead of £6984.36 (for example) if you withdrew now. Given the fixed interest deal was presumably entered into during the credit crunch years I doubt the penalty for an early withdrawal would be all that great. I think it is reasonable to ask the trustee for copies of the documents to verify what he is saying - particularly the bank statement. If your step-son needs to decide whether or not to take the interest penalty he needs to know exactly where he stands. It should be easy for the trustee to make photocopies and send them to you in the post.

 

I would also ask if the trustee should simply give your stepson the bank documents and inform the bank the account is now his, the money does not necessarily have to be actually withdrawn from the bank. This might be impossible if both stepson's money is in the same account but worth a go.

 

I'm sure the trustee's screw up is a breach of his duties under the Trustee Act 2000 and would technically merit court action, but given the amounts involved it is not worth going legal just yet.

Edited March 25, 2013 by steampowered

[hyperjase]

Thanks for your response, very interesting points there. The trustee is my step son's Aunt. She was entrusted with the amounts until they were 18, we got a copy of the Will today from Liverpool regarding this.

 

I will be re-writing my letter asking for evidence of the amount that was as at his 18th Birthday, so we know the amounts we are talking about. My step son has had NO paperwork or ever been asked whether he wanted the funds moving, this was all done without their knowledge.

 

I will repost my draft letter for opinion before printing, I think I have all the relevant information I need now.

 

Many thanks

[hyperjase]

Draft number 2 - do you think the interest rate is too high? I asked advice of a solicitor and they said more like 1% - but according to the Trustee, it was moved to a higher paying rate account (and hence why we're in this position).

 

LETTER BEFORE ACTION

 

Following the disclosure of the information that my inheritance has further been delayed beyond the duly informed date of 20th August 2012, I hereby request the full amount with five year’s interest added. The account interest has never been disclosed and because I was under the age of 18, the interest rate was a gross amount. I therefore have assumed a 5% interest rate.

 

Total inheritance: £5000.00

Interest @ 5% over 5 years: £1250.00

Total with interest: £6250.00

Plus interest @ 4% interest NET from 20/08/2012 £148.63

Total including accrued interest: £6398.63

 

I require as evidence, copies of the yearly financial statement received for the account the monies were held in, Trustee of myself. I also require a statement as of 20/08/2012 showing the £5000 inherited amount plus the interest up to the date it was required to be held in trust.

 

If you would find it easier, please forward on the documents required for me to take over the account, then I can decide for myself whether to leave the monies invested or make an early withdrawal. I would like to add that at no point was I asked or advised that the monies had been transferred to a different account where a period of time was required to access the monies.

 

If you believe that I am not yet entitled to the money, then please provide an adequate explanation why not and a clear copy of the will to enable me to verify this. I currently believe that I was entitled to the money when I turned 18 so, unfortunately, I will have no choice but to take legal action if a proper explanation is not provided.

 

I require all correspondence by post only, all phone calls will be ignored.

 

I await your reply.

 

Yours faithfully,

[steampowered]

I think the draft is great. To answer your question about the interest rate, I would be tempted to delete this the last sentence of the first paragraph and the calculations. At this stage you are trying to get your hands on the documents, so I do not think there is any need to speculate about what interest might have been payable.

[hyperjase]

This isn't looking good, mid way through next week will be 21 days since they received the letter and no reply. I suspect it will have to be done via Small Claims Court. It's interesting to note that we got a copy of the will and part it of claims that the executor "cannot be held responsible for mis-advised financial advice" - or words to that effect (I can post the exact terminology if required) -- will this cause an issue with Small Claims proceedings?

 

Many thanks for your help all,

 

Jason

[steampowered]

That's a shame. Sorry to hear the trustee is being uncooperative. I guess small claims it will have to be if he does not engage with you.

 

I don't think that bit from the will is much use to the trustee. These clauses are designed to protect trustees who seek advice from an IFA where the IFA has given bad advice. Here, it doesn't sound like the trustee is relying on third party financial advice so it won't help him.

[hyperjase]

Thanks for the reply, they claim to have been given bad advice -- but she did just claim that she'd "F**ked up" -- I know it doesn't make a blind bit of different for a court but just wondering whether they'd play the "we were given bad advice" card and my step-son will lose out.

 

I'll keep you posted on the situation.

 

Only other concern I have is that there are two levels within the Small Claims Court, one for under £5000 and one for over £5000, which would it fall under? Because it'll be £5k + interest, will it fall into the higher bracket?

 

Many thanks

[steampowered]

The limit was increased to 10k earlier this month so it would be a small claim.