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Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 33946
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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I am concerned about the PROCESS of ADMINISTERING my Mother's

Customer Question

I am concerned about the PROCESS of ADMINISTERING my Mother's assets in respect of a private TRUST, and in respect of the possible
enforcement, in future, of a POWER of ATTORNEY. The assets amount to a substantial six figure sterling sum in cash and investments; she owns
no house/flat/appartment.
My Mother is 91 years old and is in good physical and mental health. Although enabling documents exist to apply power of attorney, no power
of attorney is currently in force. She was widowed in 2004, whereupon her assets were divided approximately equally between a private trust (for
her sole benefit), and other assets in the form of cash and suitable investments. This was arranged by my brother-in-law, who became my mother's
solicitor (now since retired). The investment of all my mother's assets was led by a firm of investment advisers of high repute.
The TRUST was formed in England and has four trustees: my mother, myself, my sister and her husband (my sole brother-in-law, and the Trust's
administering trustee). I should stress that the Trust controls a set of long term investments; it is not an 'investment trust'. My concerns are:
1. Trust, I have never received documents about the constitution of the trust, or the duties of its trustees.
2. Until 2014, the trustees never met as a group, and I never received any details of asset valuation or management.
3. I am unaware of any (annual?) reports to HMRC or any other authority of the business of the trust.
4. This prevailed right through the 2008 global financial crisis.
5. In 2013, my mother's cost of living reduced considerably by a planned change in housing arrangements.
6. In 2014, my mother and I detected a large increase in her cash holdings, due to unnecessary decretionary monthly cash payments from her
investments. I wrote to my brother-in-law requesting an urgent meeting with his financial advisers.
7. Shortly afterwards the adviser presented a helpful statement of my mother's assets, and identified the lack of trustees' meetings.
8. Adjustments were agreed to correct the accumulation of cash.
9. I wrote to my brother-in-law and sister asking how I was to be kept regularly informed of the business of the trust, and of my mother's other assets. I
received on replies.
10. I am concerned about the possibility, some time in the future, of the enforcement of a power of attorney over all my mother's assets, since the
Trust, as currently managed, in effectively under the sole control of my Brother-in-law, who is in his seventies (I am 66!).
You may wonder that it has taken me so long to raise these issues. Not rocking the boat; being very selective in the issues I raised; being a busy
academic; waiting in vain upturn in transparency...
What (if any) avenues are open to me to change in the way in which my Mother's affairs are administered?
Many thanks
Submitted: 2 years ago.
Category: Law
Expert:  Clare replied 2 years ago.

Thank you question.

I will do my best to help you but I need some further information first.
Just to check - your mother still has mental capacity and the ability to deal with her financial affairs at present?
Clare
Customer: replied 2 years ago.

Clare,

Thank you Question.

My mother handles her routine cash accounts ok. (a) bank current account, statements, and debit card, and (b) building society pass book. In the past year she mislaid her debit card first time ever, but she realised that and reported it to my brother-in-law as soon as she returned home via the bus, and the card was immediately recovered.

She knows when one of her grand children have not cashed a Xmas cheque! In 2014 she realised her cash accounts were getting too big, and consulted me (as described in my Question to you).

Regarding investments, she does not deal with these, except to see the resultant monthly income payments arrive in her current account, to supplement her pension. When my Father was alive, he invested on behalf of both himself and my Mother. In 2004, my brother-in-law arranged to be consolidated -term use, through a financial adviser. So she is lacking in culture as well as experience.

"Could my Mother sufficiently understand a non-technical investment situation, and be willing to make a choice between two reasonable alternative paths of action to maximise benefit in a few years hence?" I would have to say 'NO'. She would seek not only advice, but direction.

It is with this in mind that I worry about Powers of Attorney.

I hope this conveys the information you need.

Thank you.

Expert:  Clare replied 2 years ago.

Thank you that is very helpful
Last question (I believe) - have you considered contacting the financial adviser directly?
Clare
Customer: replied 2 years ago.

Clare:

I have met him once, and we got on well. However, he has been a long-standing adviser to my Brother-in-Law, and he is not a trustee. He has made his opinion on the lack of trustee meetings clear. So, whilst I can contact him, I am loath to open a private conversation without understanding the legal context of my actions.

I do know (because I asked him) that the Financial Adviser's services are free of charge, in respect of my mother's investments. His firm is remunerated simply out of commission on sale of investments. Whilst this has cost advantages to my Mother, I suspect it means that the Adviser will not initiate evaluations of investment bond performance. If this were done, it we might ensure that my mother's monthly income is drawn, were possible, from those bonds that are historic under-performers. I doubt that my brother-in-Law is so minded, but I dont know.

So far as I can perceive, when my Mother's income from investments was reduced, due to a change in living arrangements, it was the Financial Adviser who instructed the relevant funds to reduce monthly payments to my mothers bank account. If this is the sole way in which my mother's investments are handled, then it is a wise one; but I dont know.

Finally, my personal position is NOT one of seeking to control (ie be in charge; boss) other Trustees and Trust business. I simply see my mother's wealth (in Trust or otherwise) becoming more vulnerable under the effective control of a single person. I hope there is a nice way of sorting this out, as we do meet and spend time together, very politely and sometimes more!

Thanks

Roger

Expert:  Clare replied 2 years ago.

Thank you that is helpful
Tactically would you feel comfortable involving a separate solicitor?
Clare
Customer: replied 2 years ago.

Clare

Q: Tactically would you feel comfortable involving a separate solicitor?

A: Yes, I will need the help of a solicitor, given a clear cut case in English Law that the Trust must manage its affairs differently, and (I trust) arrive at decisions unanimously.

The solicitor would advise, produce documentation Trustees and, if need be, negotiate the way the Trust will work.

Given a new agreement, what is to stop the agreement being ignored in detail?

What scale of costs attach to this work?

Given a clear cut case in English Law that the Trust must manage its affairs differently, who would be liable to meet the legal costs?

Many thanks

Roger

Expert:  Clare replied 2 years ago.

As you have already been told there should be regular Trustees meetings - and accounts presented so that you are all aware of the financial position of the trust and can consider any actions that need to be taken.
They need not be formal - sitting round a living room with tea and cakes will suffice - but they do have to happen.
In addition you are correct - you must start some risk planning given the age of your brother in law.
At this stage it would possibly be more discreet if your mother could write a formal letter asking meeting of the Trustees so that the future of the Trust can be discussed, backed up possibly with a note form you saying that you too wish to have such a meeting to address the changes likely to take place in the next few years (a suitable vague phrase which covers many options).
If there is no response - or the response is dismissive - then I am afraid there will have to be a formal letter from a Solicitor insisting on a meeting so that matters can be properly addressed
I hope that this is of some assistance - please ask if you need further details
Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 33946
Experience: I have been a solicitor in High Street Practice since 1985 with a wide general experience.
Clare and other Law Specialists are ready to help you
Customer: replied 2 years ago.

Clare:

Many thanks, ***** ***** helped me with practical advice, and have enabled me to organise my thinking.

I shall find a solicitor in English law (I live in Scotland)

Many thanks

R

Expert:  Clare replied 2 years ago.

You are most welcome - I hope all goes well
Clare

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