In the recent case of Herring & Another v Shorts Financial Services, a solicitor was found to be negligent after drafting a Will which resulted in two of its beneficiaries being denied substantial legacies.
Herring & Another v Shorts Financial Services
Background
The deceased wanted to leave £200,000 each to the two beneficiaries. A financial adviser advised that a portion of this sum, £146,000, was left to each beneficiary in a loan Trust in order to reduce inheritance tax.
Due to the Trust, the solicitor who prepared the deceased’s Will only included £54,000 for the beneficiaries in the Will, assuming that the remaining amount would transfer to them directly via the Trust.
However, the financial adviser had failed to inform the deceased that the Trust would not pass directly to the beneficiaries, but to the estate. As a result the beneficiaries were each left £60,000 short of their intended legacies.
The two beneficiaries issued proceedings against the solicitor and financial adviser. The Judge found that as the financial adviser had not been involved in creating the Will, he was not negligent.
However, the solicitor was found to have breached his duty of care to both the deceased client and the two beneficiaries, as he had failed to make “sufficient enquiries” into the loan Trust with the financial adviser before drafting the Will. The solicitor should have been satisfied that the money in the Trust would transfer to the beneficiaries on the deceased’s death, and in failing to do so he was negligent.
This case highlights how it is vital for Will drafters to thoroughly examine all aspects of a client’s financial situation when drafting a Will, to ensure that their wishes are met on their death.
How Nelsons can help
Kevin Modiri is a Partner in our Dispute Resolution team, specialising in inheritance dispute claims.
If you have any questions in relation to the subjects discussed in this article, please contact Kevin or another member of our expert team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.