A&R. Trust Dispute

Facts

The client, a beneficiary of a trust, was concerned that she had not received income from the trustees for some time and raised those concerns with us.

On examination it was evident that the trustees (2 of whom were professionals and one of whom was lay) had failed to properly invest the trust assets (substantial cash deposits) and had failed to properly manage a property portfolio, causing substantial losses to the trust.

Issues

A number of issues arose in this case, which illustrated several trustee failures:

• To obtain advice on the investment strategy for the trust assets
• To manage the property portfolio competently
• To balance the interests of the beneficiaries between those who would ultimately receive the underlying capital of the trust and those who only receive the income.

Action

The matter was dealt with without the need for court proceedings within a pre-action framework leading to settlement negotiations. Ultimately the parties reached a compromise avoiding a mediation and any court expense.

Outcome

The trustees (the professional trustees via their insurers) agreed to refund the trust a substantial six-figure sum in order to reinstate it to the value it wold arguable have been had they not breached their duties having failed to properly invest the cash deposit and manage the property portfolio. This restored the income position for our client and she obtained agreement for the payment of the majority of her costs form the trustees.