Messed up putting my mother's house in trust?

[AstonZagato]

Quite a complex story. I'm ideally looking for some help in understanding where to head next and to whom I should speak, please.

The background is as follows:

• In 2013/14, my mother started to do some estate planning with a firm that specialises in funeral plans and the like (they shall remain nameless). My mother lodged a will with them, took out a funeral plan, took out a probate insurance plan and began the process of putting her house into trust (a Family Protection Trust in their parlance) as part of that overall scheme.
• This year, my mother has descended into dementia.
• However, it now appears that the trust was never executed. The firm tried to contact my mother recently and is now speaking to me as I hold Power of Attorney.
• My mother can't remember what she had for breakfast, so I have no idea why it was not executed. The firm also has no idea (so they say) as their notes have no indication as to why it was not executed and the person responsible has apparently left the firm.
• The firm has been careful not to admit liability (obviously).

If it matters, mum's house is not hugely valuable - probably just under the IHT threshold.

This is potentially quite important now as mum will almost certainly need to go into a care home at some stage (she is currently at home with carers, meals on wheels, etc - but is deteriorating). If she goes into care, then I assume the house would not have counted as being part of her assets. It now will form part of the assessment.

Apparently, under the LPA, I do not have the authority to execute the trust as originally designed. However, I would be able to put an "equitable interest" of the property into trust (what an equitable interest is has not yet been fully explained to me). Whilst this would probably closely match my mother's intentions, I believe that it would be particularly open to being challenged, given that her circumstances have now clearly changed. Had it been executed in 2014, we'd be on more solid ground.

The firm is proposing the following:

• Place an Equitable Interest into trust now
• Increase (at no cost to my mother) the probate insurance to cover assets that would have been outside her estate but now will be caught by probate (potential admission of their liability?).
• Their outside lawyers ("solicitor partners") "will do everything they can" to defend the trust in the event of a challenge.

So any ideas where to head with this? My instinct is to seek independent legal advice. What type of lawyer? Family trust? Probate? Legal malpractice? Or just shrug and let it go?

Should I proceed with the trust? Is that worthwhile or a pointless waste of effort?

Pursue some case against the firm or seek for some indemnity against costs or even the adverse consequences of the trust not being successful in defending her assets? Seems unlikely to succeed given my only witness is my mother!

Any thoughts on the attitude that the local authority would take? HMRC (if the house turns out to be worth more than the IHT threshold)?

Sorry for a long story and lots of questions but if anyone has something constructive to say on any of it, I'd be very grateful.

To be honest, I've always assumed that my mother would end up passing on nothing to her heirs (of which I am one). So even if this all fails, I'm not fussed. However, the other heirs might take a different view. I also think that, as her Attorney, I should try to respect and reflect her wishes as much as possible.

[SystemParanoia]

sounds like mal-practice from your original solicitor ad they have mis-sold or mis-informed their service to you.

[AstonZagato]

To be clear they have sold me nothing - it was my mother to whom they spoke. I'm playing catch up. I can see that they have failed to complete one part of the scheme (the trust). Is that the basis for you saying they have mis-sold? Or that the whole scheme is pointless and ineffectual?

[Gargamel]

I assume the original lawyers were paid for this work?

Additionally it would be very unlike most firms to not have written to your Mother confirming the instructions they received. Is such a letter amongst her records?

[AstonZagato]

I'm sure they have been paid (they are not lawyers though).

I've not found any documentation. The first I found out about this was monitoring her calls - an incoming call from the firm in question. They had written to me anyway to try to advance things.

My mother's filing system isn't a system. It is chaos and most paper has been shoved in drawers or thrown away. She has also burnt the house down since then and my brother has gone through her stuff (I suspect to look for her will). Chances of finding something are slim to none.

[AstonZagato]

Thanks for that. Very helpful. You clearly missed the bit where I say "To be honest, I've always assumed that my mother would end up passing on nothing to her heirs (of which I am one). So even if this all fails, I'm not fussed. However, the other heirs might take a different view. I also think that, as her Attorney, I should try to respect and reflect her wishes as much as possible."

I don't need the inheritance. I don't particularly want an inheritance. I'd prefer that my mother had the health and mental capacity to spend it all, enjoying her last few years on this Earth rather than slowly becoming a doubly incontinent vegetable. But I guess you see her decline as "good news".

However, as her Attorney, (as I understand it) I have a legal obligation to manage her affairs efficiently and as she would want them managed. She would appear to wish that this scheme should have been put in place.

[Some Gump]

I gone him, 2cv's seems to only enjoy posting like a .

Sorry your mum is going back in the betting, dementia is a bd. When her gran was going that way, I found we could chat about things from long ago and she'd enjoy it and be happy. Was sad that she didn't remember recent things, but it made visits much nicer for all.

[AstonZagato]

I will try to get copies of all correspondence from the Firm to my mother. That might shine more light on what was intended.

[Centurion07]

I would be talking to another firm for a start.

This one has clearly fked up, can't explain why, and you're still happy to take their advice on the ongoing situation...?

[AstonZagato]

Agreed. The first thing I want to get is a better understand of what happened and what they are proposing to do to sort it out.
Speaking to this firm is the only way to achieve that.

One of my original questions was to whom else should I speak? What type of lawyer? Family trust? Probate? Legal malpractice? Generalist?

[SystemParanoia]

i'd be speaking to the provider of their indemnity insurance

[Dixy]

Whilst I admire your determination to do the best for your Mother, I think your chances of resolving it at all are four fifths of sod all. The only reason any other party will get involved is to get their snouts in the trough, the original company will blame your Mother which will cause you further distress and the local authority will fight with righteous indignation that will piss you off.
This is going to be a tough time for you and it is a battle you are best off not joining. Explain the situation to those that would also be beneficiaries and if they wish to do battle then let them.
Use the time with your family, making money is easy making time is impossible.

[Beggarall]

Dixy said:

Whilst I admire your determination to do the best for your Mother, I think your chances of resolving it at all are four fifths of sod all. The only reason any other party will get involved is to get their snouts in the trough, the original company will blame your Mother which will cause you further distress and the local authority will fight with righteous indignation that will piss you off.
This is going to be a tough time for you and it is a battle you are best off not joining. Explain the situation to those that would also be beneficiaries and if they wish to do battle then let them.
Use the time with your family, making money is easy making time is impossible.

I think this is quite good advice. I am in a similar position holding LPA for my mother who has advanced dementia. Acting in her best interests and according to (what I think would be) her wishes is sometimes difficult. However, in my case there is only one other person who might challenge any decisions and we are, fortunately, in complete agreement. The situation you describe is quite complicated. I wondered if it would still be possible to get your mother to sign the document - after all, it was her original intention and people with dementia may still express wishes and preferences even if otherwise seeming very confused. I think I would probably want to take independent advice but it maybe that the proposed plan of action put to you is one you should follow. If the value of the estate falls below the IHT threshold then it is perhaps irrelevant but the capital from the house might be at risk if your mother needs to go into care. Good luck

[AstonZagato]

All good points, Dixy.

Speaking to my boss's tax advisor, she was very skeptical that the trust would have any effect for IHT purposes (which was my suspicion too). She has no idea on the cost-of-care issue though. My base assumption is that it will not work there either.

To be honest, I don't have the time or energy to try to pursue the company - but it depends on how egregious the fees charged to my mother were.

[Rude-boy]

Gargamel said:

I assume the original lawyers were paid for this work?

Additionally it would be very unlike most firms to not have written to your Mother confirming the instructions they received. Is such a letter amongst her records?

For the education of the biased.

Most solicitors run a mile from these sorts of schemes, especially those which involve the family home. They are fraught with potential issues and liability that ends at our door which we have no interest in adding to that already assumed by us.

Still get about 3-4 calls a month though from people asking about transferring Mum and Dads house to them 'in case they need care'.

On the other hand there are plenty of unqualified 'Will Writers' and the like that are happy to sell you some magic beans with little or no regulation and almost no comeback, if any.

[mjb1]

What was the original intention of putting the property into trust? You say the house is worth close to the IHT threshold, so does she have other significant assets that would take her well above it?

I thought it was the case that putting the house into trust doesn't stop the LA coming after it to cover care home fees anyway? Makes it more difficult for them I guess, and maybe different LAs are prepared to fight harder than others for it?

You say you are trying to do what your mother would want, maybe she would want the house to be sold to fund a better level of care for her than the minimal LA funded care? Unless she told you she wasn't bothered about that, and would rather avoid the care home fees?

[Rude-boy]

AstonZagato said:

All good points, Dixy.

Speaking to my boss's tax advisor, she was very skeptical that the trust would have any effect for IHT purposes (which was my suspicion too). She has no idea on the cost-of-care issue though. My base assumption is that it will not work there either.

To be honest, I don't have the time or energy to try to pursue the company - but it depends on how egregious the fees charged to my mother were.

Last sentence. That is the one that makes the most sense of all of this.

It really does depend upon the set up your mum saw as to how much joy you are likely to be getting off them. As an example a few years ago a solicitors firm was found to be negligent because it closed a draft will file without sending out a final letter to the Client who had instructed them and then ceased all contact for over 12 months iirc. The firm was held negligent as they should have sent a final letter to the Client (in addition to those that they had sent when the matter was 'live' asking the client to contact them to arrange to sign with no response) advising them that they were closing the file before they did so.

With the above in mind it is worth looking at the company your mother used and if they do have any regulators and if they do have any PII. if there is PII then you may want to look at perusing them, if there is none the best idea is to remove all business and have a proper private client expert look at it all and where you (mum) is really at and how best to go forward. You need someone who is not only a member of STEP but has the initials TEP after their name. It is not hard to join STEP but to get the TEP qualification you have to be on top of your game.

[anonymous-user]

Rude-boy said:

Gargamel said:

I assume the original lawyers were paid for this work?

Additionally it would be very unlike most firms to not have written to your Mother confirming the instructions they received. Is such a letter amongst her records?

For the education of the biased.

Most solicitors run a mile from these sorts of schemes, especially those which involve the family home. They are fraught with potential issues and liability that ends at our door which we have no interest in adding to that already assumed by us.

Still get about 3-4 calls a month though from people asking about transferring Mum and Dads house to them 'in case they need care'.

On the other hand there are plenty of unqualified 'Will Writers' and the like that are happy to sell you some magic beans with little or no regulation and almost no comeback, if any.

Yep.

AstonZagato - you want to speak to a solicitor who specialises in estate planning and who either does, or has a partner who does professional negligence work.

The basic point is that someone was engaged to do something but failed to do it, and now you're trying to get it done.

The thing that pops up immediately to me is that as Rude-boy says, these schemes very often get ignored by local authorities when they make their assessments. So whilst it is possible that the original advisors are bang to rights on failing to do their job, it is quite possible that their failure hasn't actually caused any loss (because had they done what they were supposed to have done, it would not have worked).

You need first to establish, I think, whether the scheme that was originally proposed would have worked. That will determine (a) whether you have a basis to go after the original advisors, and (b) whether you should now be troubling yourself with the work required to try to implement the scheme after the event. And you need (b) to cover your arse (or otherwise) as attorney.

Good luck. My gut tells me that the original scheme was never going to work and it's a dead end trying to set it up now; the house has to going into the pot that the LA will assess your mother's care costs from.

ETA: and if it does turn out to be an unsalvageable situation, ultimately you want (again to cover your own arse) a written sign off from the other potential beneficiaries that makes it clear not just that they agree to taking no further steps, but that they fully understand why.

Edited by anonymous-user on Friday 8th September 11:54

[AstonZagato]

mjb1 said:

What was the original intention of putting the property into trust? You say the house is worth close to the IHT threshold, so does she have other significant assets that would take her well above it?

No other significant assets. A low number of thousands. I have no real idea of her intentions. I did have some conversations with her about IHT a while back. In retrospect, it was probably prompted by her organising this stuff. Her worries at the time were IHT and care costs eating into her estate.

mjb1 said:

I thought it was the case that putting the house into trust doesn't stop the LA coming after it to cover care home fees anyway? Makes it more difficult for them I guess, and maybe different LAs are prepared to fight harder than others for it?

This is my base assumption too, especially if she was living in the house. I have no experience of whether LAs fight this stuff or not. I am pretty sure that they have more appetite and deeper pockets than my mother or I to do so.

mjb1 said:

You say you are trying to do what your mother would want, maybe she would want the house to be sold to fund a better level of care for her than the minimal LA funded care? Unless she told you she wasn't bothered about that, and would rather avoid the care home fees?

What my mother wants is to live as long as possible in her own home. In reality, we never got further than that. She still seems to be of that view but I am now increasingly facing safeguarding issues - she was picked up by the police confused and lost last week. She has carers twice a day and meals on wheels. The issue we face is that her savings will not cover a higher level of care in her own home for any extended period of time. The type of care she would want is difficult to know. She'd be horrified if her assets were taken to pay for her care but equally I doubt she wants a basic care home.

[AstonZagato]

Greg66 said:

Stuff

Lots of good points there and I guess that sums up my thoughts currently. The only thing I might do is pursue them for the original advisory fees paid.