Family Protection Trusts – FAQ’s
Are the funds in my Family Protection Trust (FPT) safe?
Yes. Jones Whyte has confirmed that FPT funds, totalling approximately £120 million at the time of transfer, were held in a separate client account and were therefore unaffected by McClure’s entering administration. Client funds are protected by strict regulations.
My house was not transferred to the Trust. Is the Trust void or voidable?
First, are you sure the house was not transferred to the trust? Scottish trust deeds do not identify the property transferred to the trust deed on its formation so it may appear that your trust is “empty”. The Truster likely signed a separate deed called a disposition transferring the house into the ownership of the trustees. This should have been used to record the trustees as owners at the Scotland Land Register.
Obtain a copy of your title sheet (Referred to earlier in doc cross ref). Then look at section B – Proprietorship register. The proprietor may be one of the McClure’s Trust companies, previously mentioned or there may be two named McClure’s partners /solicitors. The Truster may or may not also be named as a trustee. It may say the “Trustees acting in terms of the Deed of Family Protection trust granted by…” or some similar wording. Any of these let you know that your property WAS transferred into the Trust
English law trusts identify the property transferred, or to be transferred, in a schedule to the trust deed just before the signature pages. You should still check the proprietorship register at HM Land Registry for England/Wales though as this should show McClure’s names if the property was actually transferred.
If you discover that there are no McClures names on the proprietorship register then you will need legal advice. The answer to your question may depend on whether there was no Disposition or Transfer made by the Truster/Settlor, or there was one made but it was not registered.
Another possible reason for there being no sign of the trustees on the proprietorship register is that McClures used a variation of the usual FPT to get round any restrictions on transferring the legal title such as in a mortgage or Housing Association shared ownership scheme. Or to avoid triggering a liability to repay an improvement grant or “right to buy” discount. Lawyers would call this a trust of the Settlor’s beneficial or equitable interest only. Legal title to the house is not transferred to the trust but the Settlor/Truster, who remains the registered proprietor, then holds the legal title on trust for the trustees of the beneficial interest trust. The end result is that there is a trust which in terms of how the sale proceeds of the house are dealt with after the Settlors death operates much like the normal FPT. However, because the legal title was never transferred the trustees don’t show up on the Land Register so at first sight it appears there is no trust or it is empty.
We will reiterate again, especially as there has been much misinformation and concern over this, that just because McClures staff (or one of their Trust Companies) are named on your land register title does NOT mean they have a personal right to a share of your house or that your house could be used against any personal debt etc that they have accrued. Whilst they do have legal ownership and control of the trust assets, they are NOT beneficiaries of the Trust. They hold the legal title on trust for the beneficiaries subject to their powers and duties under the trust deeds and they have an obligation to act in the interest of the beneficiaries, not themselves.
We also want to say again how important it is to remove these people from their position as trustees and from the title register. For example, would you want them to be the people exercising the discretion over distribution of the trust property after your death?
Can I just tear up the Trust Deed and start again?
No, once signed the Trust Deed creates legal obligations and changes property rights. There are ways of amending it and the Trust can be wound up and the assets passed back to you but not without going through a complicated legal procedure. Unlike Wills which can be revoked by a later Will or even by simply destroying them, these Trusts cannot just be torn up and forgotten about.
The local authority social services department are saying my Trust isn’t effective and they are going to charge for care costs. What can I do?
You will have to take legal advice.
If social services are alleging “deliberate deprivation of assets” have a look at this fact sheet published by AGE UK:
LINK: AGE UK
and, this guidance note produced by the Local Authority and Social Care Ombudsman:
LINK: Local Authority and Social Care Ombudsman
The Ombudsman website has a searchable database of its decisions on complaints made against local authorities. This shows that social services do sometimes get it wrong when alleging deliberate deprivation of assets.
Should I stay with Jones Whyte?
We suggest not, but you may choose whichever company/solicitor you wish. On first contact, Jones Whyte may try to persuade you that you should instruct them to carry out a “Review” of your FPT/Will/POA. They will not even discuss your own Trust with you until you sign their mandate – and pay in advance – for the “Review”. The cost of the Review is approx. £400 + VAT, per Trust. Something that other solicitors do not appear to charge.
How can I find a competent and trustworthy solicitor to help me?
The public Facebook page, ‘Victims of McClures Solicitors’, has a ‘Files’ tab at the top which includes a downloadable excel spreadsheet giving details of solicitors’ firms all over the UK that have been used and recommended by others.
This list does not identify the number of recommendations received. Also, some firms work only in Scotland so may not be able to advise if you are resident in England (and vice versa). Some are regulated to work in both countries. Some have fixed fees. Some don’t do the tax calculations and accounting required for Trusts. It depends what you need their advice for, so do ask. Many solicitors will provide a free initial consultation. This can be useful to help you find someone who not only understands the situation and the proper process but whom you trust.
Remember, many solicitors are able to work remotely via email, telephone, and/or video call. Search online, check reviews and ask around if they are local. Don’t be afraid to call a few (or many) to make sure they have the necessary experience, can action everything you require actioned, find out prices (fixed fees may give you more peace of mind) and give you an idea of the timeframe for works to be completed. If they are vague about costs or what work is involved/required, use them at your own peril.
Here are links to find solicitors: For solicitors in Scotland:
LINK: Lawscot
For solicitors in England and Wales:
LINK: Law Society
For Scottish Solicitors based in England and Wales:
LINK: Lawscot
After changing the Trustees should I wind up the Trust or keep it?
Only you can make that decision. Many people seem to be working towards winding up the trust and passing assets back to the Settlor/Truster. We suggest not rushing and taking time and appropriate professional advice before deciding. By the time you reach this stage, a significant sum has probably been spent on originally setting up the Trust and a similar amount on sorting out the problems.
If there were good reasons to set up the Trust in the first place, then you may wish to consider letting it run on to achieve the original objective(s). Do seek professional legal advice – especially regarding the validity and accuracy of the Trust and if it will do as you had intended.
Also take into account the IHT issues.
There is a document “Dissolving an English Law McClure FPT” accessible for the Victims of McClure Solicitors Facebook Page, which provides guidance but does not provide specific advice as to whether a FPT should be retained or wound up, this must be the Settlor/Truster decision.
Can I complain, and, if so, who to?
Yes, you may. Be clear about the issues you want to complain about and have all your evidence to hand. The relevant bodies are there to help and advise.
The Scottish Legal Complaints Commission (SLCC) is the portal for all complaints against legal service providers in Scotland. They will decide if your complaint is an inadequate service issue, which they deal with, or a professional conduct issue, which they pass on to the Scottish Law Society. So, if you dealt with a McClures office in Scotland, your complaint should be directed to the SLCC.
LINK: SLCC
For those who dealt with one of the McClures offices in England, your complaint should be directed to Solicitors Regulation Authority (SRA) for professional conduct issues or the Legal Ombudsman for inadequate service issues.
Look at these links:
LINK: SRA
LINK: Legal Ombudsman
There are time limits for making a complaint. The SLCC will look at complaints made within three years. This is three years from when you reasonably found out about the issue, not the date the issue may have happened. For example, you bought a house twenty years ago and paperwork was not completed properly. You only found out recently when trying to sell the property. You have three years to complain even though the inadequate service happened twenty years ago.
The Legal Ombudsman’s time limit is less generous. In their Consumer FAQs page, they say:
“From 1 April 2023 you also need to refer your complaint to us within one year of the problem you are complaining about happening, or if the problem occurred more than one year ago, you need to bring your complaint to us within one year of you becoming aware of the problem. We have strict time limits and if you fail to do so, it is unlikely that we will be able to investigate your complaint as we are only able to investigate complaints which fall outside our time limits where it is considered fair and reasonable to do so.”
Having a complaint against McClures upheld by the SLCC or Legal Ombudsman is one thing, getting paid for any award they consider appropriate another.
Both organisations have a page devoted to the additional problems involved in bringing a successful complaint against firms no longer in business. Both make it clear that you will have to pursue the professional indemnity insurers and you will probably not recover the element of any award representing a refund of McClures own fees.
LINK: My solicitor has gone out of business
LINK: Legal Ombudsman Factsheets
Do I need to have solicitors as executor of my Will or trustees of my FPT?
If they advised you at all before putting themselves on your Will or FPT, McClures probably suggested that you should have professional executors and trustees. Jones Whyte are also saying this when giving advice as part of their “reviews”.
There is no legal requirement to have solicitors or other professionals as executors or trustees. If non professionals such as family members ever need legal or tax advice to help administer an estate or carry out their duties as trustees then they can instruct solicitors or specialist accountants of their choice to help and advise. As the clients they would remain in control, rather than handing over control to law firms such as Jones Whyte whom as executor or trustee could/would generate a future revenue stream for the company.
Are the funds in my Family Protection Trust (FPT) safe??
Yes. Jones Whyte has confirmed that FPT funds, totalling approximately £120 million at the time of transfer, were held in a separate client account and were therefore unaffected by McClure’s entering administration. Client funds are protected by strict regulations.