Why Choosing the Right Trustee Matters – A Real-Life Case Study

Fraud of a child's inheritance

A recent case has come about whereby two people were found to have defrauded two minor beneficiaries of a trust.

A grandmother passed away in 2013 and left money to her two grandchildren, who were aged 15 and 12 at the time.

The Trustee was the grandchildren's mother, and the funds were therefore due to be managed by her for the benefit of the children.

However, the mother moved the monies into a savings account and withdrew funds to pay her mortgage, bills and enjoy “a lifestyle they would not have otherwise been able to afford” (stated by the Judge).

In 2018, one of the granddaughters sought money to purchase a property and, at that point, the Trustees' actions were revealed.

In essence, it was found that the money had been stolen because the daughter was upset that her children received more money than she did.

The daughter was ordered to repay £50,000 and has been told to raise equity from her own in order to repay her children. She has also been sentenced to 30 months in prison.

I found this case particularly interesting because I explain to clients on a daily basis that it is so important to consider who you are stating in your Will to act as Trustee, particularly when it relates to minor children.

This is also the case with guardians, i.e. the people you appoint to care for your children, should parents with parental responsibility pass away before they reach 18.

Do not simply write anyone's name down on your Will, think about it carefully.

Emma Aslett

Penn Chambers Solicitors   

0207 183 4595

The information provided in this article is not intended to constitute professional advice and you should take full and comprehensive legal, accountancy or financial advice as appropriate on your individual circumstances by a fully qualified Solicitor, Accountant or Financial Advisor/Mortgage Broker before you embark on any course of action.