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Discovered that a solicitor hadn't followed my mum's instructions and transferred land properly when asked to - please help! (quite long, sorry)(8 Posts)
Is there anybody out there that could please give me some pointers as to where to start? I'm a regular poster but have obviously namechanged in case anyone recognises me or this situation.
Brief background: My mum had inherited some land when my dad died that his business was on, my dad and gm owned it 50:50. The family business was still running on the land, uncle had taken it over, and he paid rent to her.
My mum decided to give the land to my sister and me in order to remove it from her estate for tax purposes. Around this time my nan died and decided to leave her 50% of the land to my cousins, but with the proviso that uncle had use of it for the family company for as long as he wanted.
Somewhere along the line, seems that my uncle put the land into a trust for my cousins to enable him to use it, he and the (now retired) solicitor were the trustees, mum at this point didn't know about the trust.
Mum used the same solicitor (he was originally my dad's solicitor and didn't say at any point there was a conflict of interest as he was also my uncle's solicitor) - she asked him to transfer it over to us, saying the reason she was doing so was to get it out of her estate. My uncle turned up with lots of documents for her to sign, saying that it would be much easier if it was all in trust, then my cousins' could be beneficiaries of the rent too (he was by this time selling the business to new people and therefore cousins would be getting rent for the first time). When my mum questioned it, he said she would be the trustee as he didn't want the new buyers to be put off by having to deal with lots of people as land owners and also she lives just down the road so was easily contactable, could make a decision if one was needed without needing to get hold of both of her dd's etc. So she agreed.
The company that bought my family company went bust a little while ago, but our 'bit' has been bought out and is now a going concern again, hence looking back through all these documents and needing to create a new lease and get everything shipshape. We thought it would be a simple matter of her
To our horror, it turns out that the solicitor didn't transfer ownership of the land - just the beneficiary interest in it - to my sister and me. Turns out we had sort of raised this with them at the time - I'd sent them an email asking, as one of the land owners, for a version of documents to approve prior to things being agreed. Email back had said that we weren't owners, mum was. I'd passed this on to mum and she'd tried to contact the solicitor but never heard back, then she was away, then ill and it slipped through the net. In hindsight she was naive - she knew she'd asked him to transfer ownership to us for inheritance tax purposes, so she couldn't believe that he wouldn't have done that. She didn't even know it was possible to pass over a beneficiary interest in something while retaining ownership. It never occurred to her that they wouldn't have done what she asked, and thought it must have been a mix up. And in separate hindsight - she now wonders if uncle and solicitor cooked this up between them as it suited them, then just blinded her with lots of weasly words and told her it was all sorted as she wanted and just got her to sign on the dotted line for the 'transfer' forgetting to mention in simple english she wasn't transferring it out of her estate...
It also seems likely that the land was all put into the trust by my uncle without my mother knowing about it - despite the fact that she owned half of it - partly due to the fact that one cousin at the time was going through a divorce and he saw this as a way to hide an asset from her general assets as she didn't know that she owned it, IYSWIM. It also suited my uncle significantly to have just my mum to deal with as an owner rather than having to deal with both my sister and me.
So - what next? (apart from panic obviously!)
The original solicitor has retired. The new solicitor working on the case for us has said that it is going to cost at least £1000 to start to dig into the history of the trust, find out what happened when it set it up and where it stands now. We obviously feel pretty aggrieved at having to pay for this as we feel it is their problem and what's more, it's now causing us big problems when we really don't need them (ie trying to get the new lease sorted out asap, but we can't as the right names with the right owners need to be on the documents). In the longer term there are other things like if my mum should die sooner than 7 years (god willing she won't but she is almost 80 now so there are no guarantees that she will still be around then) then we are going to be landed with a much bigger inheritance tax bill than we would have done (this happened about 10 years ago so she was thinking it was happily out of her estate), and if we eventually sell it, we will have potentially much bigger capital gains taxes to pay as we won't have as long to offset it against. And whilst it is industrial land at the moment, there is a good chance that in a few years time it could be good building land so whilst it is not worth lots now, it might be then, so would potentially be a big capital gain looking at value now to then.
I don't have lots of money spare to pay for all this - I'm a SAHM as is dsis, mum doesn't have loads of cash floating around. It's the way that the solicitor has blandly said that it will cost a £1000 just to start looking at this that is worrying, could end up costing a lot more than that.
And separately there's the ethics of the solicitor that created the trust and put mum's land into it without her knowing, which seems pretty outrageous behaviour.
So (if you've made it this far - big congratulations if you have!) what do you think we should do? Would you pay to investigate? the fact that things have been left half undone - my aunt is still listed as the other land owner and trustee - she died a few years ago, after my uncle, so we can't just leave it as it is as that needs to be sorted out - the solicitors involved also were the ones that tied up and sorted out her estate so no idea why they didn't do anything about that when she died but they are refusing to do nothing because they are insisting it's right going forward (if only they were that good at doing what they had been asked years ago!)
Or should they investigate as the problem is of their doing or should we be complaining to the Law Society or whoever is the solicitor watchdog these days - and would it make any difference anyway as the guy who did it all is now retired and not covered by insurance (cousin spoke to him recently not realising he was retired - the insurance thing was one of the first things he said to him!).
Head's just swimming and not knowing where to even start thinking about things. Any help or pointers in the right direction would be fantastic - so many thanks in anticipation.
You only "know" from the cousin that the insurance doesn't cover this solicitor's past work, but it does rather suit him to lie, doesn't it? Of course insurance has to cover the legacy of professional decisions and practice! Contact the Law Society to check for how to approach sorting out suspected malfeasance.
Perhaps the police (fraud division) could ease the burden of investigation somewhat, if there is a case to answer?
In any case, even if he's not insured, that doesn't mean (a) his firm isn't (perhaps he was covered by them) or (b) that you can't go after him personally. If he insists he's not insured, well, let him pay himself!
I'm not an expert in any of this, but you di say you were looking for approaches...
I'm a bit confused by your post as it sounds as though your mum agreed to set up a trust for the land rather than transferring it to you, but it all sounds rather complicated. What your mum can do is make a formal request to the solicitors for her file, as this should contain every single document relevant to what happened, including any written records of her instructions to the solicitor and everything documenting what actually happened. I would suggest you start by reviewing the file yourself to see if you can work out exactly what has happened.
Second, on the subject of insurance, it shouldn't make any difference that the solicitor involved has now retired. Professional indemnity insurance is usually provided on a "claims made" basis, which means that if you make a claim, it's the insurance in place at the time of your claim (or threatened claim) which is relevant. The insurance is highly likely to cover negligence carried out by all current and past partners/employees of the firm - I'm an insurance lawyer, and I would be amazed if their insurance doesn't respond for claims against retired partners/employees.
Once you have a good idea from reviewing the file of exactly what has happened, I would strongly advise you instructing a different firm of solicitors to look into this properly for you. In the meantime, you might want to set out in writing to the firm involved that you believe your mum may have a claim against them for negligence and that they should notify their professional indemnity insurers accordingly. I am absolutely amazed that they are suggested charging you for looking into this when you have indicated that you believe they have failed to follow instructions, so I would also recommend that you ask for a copy of their complaints procedure and escalate this to someone more senior. They should be looking into it free of charge given it raises conduct and negligence issues.
Go and see a solicitor who specialise in professional negligence
There is a complaints procedure -years ago I was very unhappy and went down that line-luckily I had kept all correspondence and logged telephone calls and, in my case, I was awarded money back. Without spending time looking back I can't remember how I initiated it. Go to the CAB as a starting point.
I didn't employ another solicitor to do anything and it didn't cost me anything-except time to fill in forms.
Thanks for all your answers, most insightful and helpful.
ChristmasIsForPlutocrats - I just mentioned about what my cousin said, he thought it a strange thing that the first thing the old solicitor said was about not being covered by insurance. Cynic in me says guilty conscience. And, if he has done something wrong, then it wouldn't bother me if he had insurance or not, that's his look out! I'd still sue him quite happily even if it meant he had to downsize his house instead of professional insurance covering it. And I'm sure that he would be covered for the time he was practising anyhow, and that that would cover it.
mycatlikestwiglets sorry to confuse. It's probably because we are confused ourselves... I think that the problem is that Mum asked the solicitor to transfer ownership of the land to my sis and me - and then because it was in the trust because of my nan's will (albeit not that my mum was involved previously, think that is a whole separate issue) they talked her into the land staying in trust. The problem is that they never explained to her that the way they did it, she remained the owner of the land and she gave us the beneficiary interest. She had no idea that such a thing was possible. She thought that we were the new owners of the land, as she had asked, but that she was becoming a trustee of the trust just to reduce the number of people on the lease etc documents, and (in those pre-mobile phones being ubiquitous days) it meant that there was somebody local to deal with it. Otherwise she would a) never have agreed to it when the only reason she was doing it was to move the land out of her estate - she didn't care two hoots about whether there were lots of names on the lease document, why should she. and b) she was thrilled that she was giving us the land that had been dad's - she gave it to us one year as a christmas present, and she was always really chuffed that she had been able to give us something that would be an asset going forward into the future, at a time when she figured we could do with a couple of thousand pounds extra income as we were not too long out of college and then went on to have kids so helped towards providing a few treats when I became a SAHM for example.
I also have a horrible feeling that there is probably no written instruction on file in the same way there is now - and if there was a letter that mum wrote then the chances of her having a copy are pretty limited. I'm sure that if anything was written down it would have been done for her and sent to her to sign, and would be couched in weasly words to cover both interpretations.
They have now sent some of the documents to Mum and I've quickly scanned them. Unfortunately the solicitor that sent them back has kind of skirted around the issue of 'why didn't you transfer the land to my dd's?' and just shown assorted dates and documents. I haven't had a chance to sit down and go through them all with a fine tooth comb, or come up with a list of questions. But from looking at a couple of other documents that mum had that were minutes of a meeting, she said that in hindsight they had been very selective about how they had been reported - things like there had been a discussion about the length of the lease, she had said she didn't mind if it was for 3 or 5 years as who knew if there might be a change to local property development regulations and boundaries - it was noted in the minutes as 'Tenant wanted 5 yr lease. C's Mum said it could only be 3 years to allow her to then develop the property' - and whilst technically she did say those words, by omitting the rest of the conversation, it puts a completely different spin on it to the actual way the conversation went. When I asked why she didn't send her own version in at the time (doesn't help that she doesn't have a computer or typewriter so writes letters longhand) she said it hadn't occurred to her because she didn't know that you could do that, she assumed once they were written that was that.
I will definitely pass on all your great advice verbatim about getting the full file from them, notifying them of a potential claim against the firm, getting the complaints procedure and finding someone else to look into it etc
exoticfruits - I'll also get her to check out CAB, thank you.
Thank you all again for your kind advice, it's horrible watching this unfurling in front of you and not knowing where to turn as the people that are supposed to be advising you are the ones that have caused the problems! sorry it's been another long post!
OP, the solicitors' file is likely to have a lot more information on it than you are expecting. They should have written notes of all meetings/telephone calls etc. with your mum, and also a formal letter of engagement which sets out what they are instructed to do. It should be relatively clear (to another solicitor, if not to you) exactly what the solicitor believed he was instructed. Somewhere, if your mum made herself clear, there should also be something recording that the point of the transaction was to make sure the land was removed from her estate for inheritance tax purposes - that's the key issue.
Are you sure that the end result isn't actually that, even if the land wasn't actually transferred to you? And if not, as your mum is still alive, can you rectify the situation now? I think given the complicated situation it would be a worthwhile investment to instruct another firm to look at this for you and advise you properly how to take the matter forward - both in terms of doing what your mum originally wanted to do and looking at your prospects of claiming successfully against the original firm.
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