Every now and then, all too often in fact, one comes across this despicable practice. It is a really grubby scenario. People who call themselves a Will Writing company or a Trust Corporation say that they can shield the family home from having to be sold to pay care fees and shield the estate from Inheritance Tax by the mechanism of placing the house, and possibly other money, in trust.
In general, this doesn’t work. Not at all. Local authorities are entitled to undo transactions to seek payment of care home fees and placing the property into trust whilst remaining living in it won’t work for Inheritance Tax.
But, Will Writing companies and so called ‘Trust Corporations’ continue to scam.
Even worse, an all too common scenario is that a respectable body, employer or building society, for example, recommends one of these unlicensed unregulated bodies to their staff or customers. Of course, the so-called Trust Corporations and Will writers target elderly homeowners who are financially unsophisticated.
Elaborate trusts are often set up. Trustees don’t pay attention. They go missing. The house is difficult to insure. It’s very difficult to sell the house and when you do want to do anything the so-called trustees then demand another fee.
The respectable body, employer for example or building society gets a fee or commission off one of these grubby companies.
The Dispute Resolution team have recently had two examples (both will resolve satisfactorily). One was a recommendation from a major building society to its customers who engaged with one of these so-called Trust Corporations, which shortly afterwards went bust and the trustees tried to disappear.
The other case was a respected local employer recommending, and this happened multiple times, retiring staff to a firm of solicitors (!) no less who gave the same misleading advice about trusts. Those carrying out the practice made fees, quite a lot of fees. The “respectable body” introducing a Will Writing company or Trust Corporation was paid a commission. The poor customers paid fees for something which was not only of no use but often was difficult to untangle and could well have been prejudicial.
There are mechanisms for dealing with such a scenario including the Variation of Trusts Act, forced retirement of trustees, complaints or claims against the “respectable body”. Increasingly the victims set up an action group, usually on Facebook. These groups contain a lot of ranting but also can contain very valuable information.
Even worse sometimes the elderly couple are “advised” to “invest” in the so-called Trust Corporation. If possible, to invest all their, usually modest, life savings. A lot of this “investment” just vanishes
Why, oh why, is it lawful to write Wills for a fee if the writer is not properly qualified?
The authorities do slowly catch up with these grubby crooks – but usually years after the event. Bent solicitors are often struck off. The liquidators of the Will Writing company or trust corporation face substantial creditor claims and pursue or try to pursue the former directors.
I come back to the real question “why oh why is this practice allowed to continue?”
If you would like to discuss this in more detail with a solicitor, please contact us on: 0345 209 4700