Case Study: How Legal Guidance Could Have Made a Difference

One of our new instructions this week led me to think again and highlight the importance of taking legal advice when you are not 100% sure what to do or that you are doing the right thing.

I met with two new clients this week—a mother and daughter. The mother’s husband had died some years ago, and at the time both parties had mirror wills, had done a severance of tenancy, and created life interest trusts in their wills, essentially ring fencing their ½ share in the total marital estate, enabling the surviving spouse to use the income, interest, and property until her death, at which point the estate passes to the two children. So far, so good—all pretty standard stuff and what you would expect to see. However, it’s never that simple, is it?

Since dad’s death, the family has fallen out with the son, and he subsequently died.

First question: do the deceased son’s children now take their father’s share of the estate? The family does not want this to happen, as they are also estranged from the grandchildren.

We look at the construction of the will and interpret it for the family. Answer: Yes, they do. This is not what the family wants to hear, but it is important to know the correct legal position and what you are dealing with.

Second question (from me): where are the trust assets?

Answer: in trust.

Question (me): Where exactly?

In an account with xxx

Ok, how much is in there?

£200k (should be £300)

Ok, how is that made up from the assets you declared at probate (done in person without legal representation)?

It then comes to light during the conversation that the estate assets have not been invested correctly, which would leave the executors and trustees open to a claim from the ultimate beneficiaries.

This is highlighted, and the clients are told what “homework” we need from them to bring back so that all this can be corrected properly before either the life tenant (mother) dies or the trustees decide to appropriate the trust assets to the beneficiaries to eliminate any claim.

The main takeaway from this meeting was that this could all have been amended to the family’s benefit; had they taken legal advice within 2 years of death, the estate could have been varied to ensure the grandchildren were not beneficiaries of the estate. The clients did not take advice and were not aware of this.

It also highlights the importance of keeping good records and ensuring that you do, in fact, understand how estates are devolved in the legal document.