The Limitation Act 1980 defines limits as to when claims can be made by an individual. The Act covers a number of claims, including claims in respect of a Trust breach. A breach of Trust claim is generally brought against a Trustee(s) with the aim to seek recovery of Trust property which has been lost as a result of the breach.
What are the time limitations for making a breach claim against a Trustee?
For non-fraudulent breaches, such as claims of negligence, claims cannot be brought after six years since the date of the breach. The date of the breach is defined to be the date of the action, and not the date of the loss.
For fraudulent breaches and breaches which result in Trust property being retained by the Trustee in breach, there is no limitation period as to when a claim may be brought. In these circumstances, action may therefore be made at any time but in most cases the longer that any claim is left, the less likely it will be that a claim will succeed as fundamental evidence will most likely be lost/destroyed over time.
Who can bring a breach claim against a Trustee?
Only beneficiaries and Trustees of the Trust may bring a claim against a Trustee(s). There are, however, the limitations as to what type of beneficiary can bring a claim and when below.
- Beneficiaries with only a future interest in a Trust cannot bring a claim until the interest becomes due. Here, the limitation period will not begin until the beneficiary has an absolute interest. By way of example, a beneficiary who at the age of 18 alleges a non-fraudulent breach by a Trustee but has no entitlement until the age of 25 is able to bring a claim within six years of the breach being committed.
- Life interest beneficiaries can bring a claim in respect of their interest during the period in which they have an interest and up to six years after the breach, for non-fraudulent breaches.
- Beneficiaries acquiring a right after the death of a life interest beneficiary can only make a claim once the life interest terminates, at which point the periods of limitation begin. This is treated the same way as those who have a future interest.
How Nelsons can help
Stuart Parris is a Trainee Solicitor at Nelsons.
If you feel you have a potential claim and would like to discuss this further, please contact our expert Inheritance Disputes team in Derby, Leicester and Nottingham on 0800 024 1976 or via our online form.