Failure to check a client’s intentions about her will left a solicitor in hot water. The beneficiaries were left £62,500 short of the inheritance they expected and accused the lawyer of negligence. The solicitor settled out of court but was later criticised by a judge in a case against the client’s financial adviser.
Mrs Shemwell intended to give her great niece and nephew £200,000 each in her will. She was a wealthy woman and had consulted her financial adviser, Mr Sully of Shorts Financial Services LLP, about the best way to make the arrangements. Mr Sully advised her to set up a discretionary trust of £175,000 and a loan trust for £125,000 to take maximum advantage of her inheritance tax allowance.
Rob Woodhead of BRM solicitors was appointed to draft Mrs Shemwell’s will. It was claimed that he failed to establish whether the money in the loan trust would fall outside her estate and would pass directly to the beneficiaries as Mrs Shemwell intended. In fact when Mrs Shemwell died, the loan trust became part of her estate, leaving the beneficiaries each short £62,500 of their inheritance.
The beneficiaries sued both the financial adviser and solicitor to recover their loss. BRM Solicitors settled at mediation before the trial. When the case was heard against Shorts Financial Services, Judge John Behrens cleared the financial adviser, on the grounds that he had not been involved in drafting the will. But he said it was “difficult to resist the conclusion that the solicitor had breached his duty of care to both the claimants and his client.”
“According to the judgement the solicitor did not ask the financial adviser fully about the trusts, relying instead on a short conversation and a brief aide-memoire,” said James Burgoyne, Director – Claims & Technical, Brunel Professional Risks, said: “We don’t know the exact details, as the case against the solicitor was settled out of court, but this shows just how important it is for solicitors to ensure they understand the details of a client’s intentions and financial planning arrangements when they are writing a will. Otherwise they could face claims for negligence if the will subsequently produces a less favourable outcome.”