A judge has ruled that a solicitor was negligent when he drafted a will that left 2 beneficiaries with £62,500 less than his client had intended.
In the case of Herring & Another v Shorts Financial Services a professional negligence claim was brought by Tim Herring and Claire Hartley who were beneficiaries of Mrs Shemwel’s will. They alleged that the solicitor who prepared the will on Mrs Shemwell’s behalf had been negligent for not ensuring that they were left the full sum of £200,000 intended for each of them.
Court proceedings were initially commenced against the solicitor and Mrs Shemwell’s financial adviser at Shorts Financial Services. A settlement in respect of the claim against the solicitor was negotiated at mediation last year. This left the claim against the financial adviser to be heard by the court.
The background to the claim was that the financial adviser had advised Mrs Shemwell to set up a loan trust to reduce the amount of inheritance tax that would become payable on her death. However the way in which the trust was created meant that the loan trust monies did not automatically pass to Herring and Hartley. As a result they both received less money upon Mrs Shemwell’s death than had been intended.
The trial judge concluded that the financial adviser did not owe a duty of care to Herring and Hartley because he hadn’t been involved in drafting the will. The claim was therefore dismissed.
Nevertheless the judge was critical of the solicitor’s role, commenting that the lawyer had breached his duty of care to the claimants (who were not his clients) as well as Mrs Shemwell (who was) for failing to ensure that the trust money passed to Herring and Hartley on her death. It was alleged that the solicitor had failed to adequately question the financial adviser about the loan trust before he prepared the will. The lawyer did however speak to the financial adviser and was given a copy of an aide-memoire which the adviser had prepared.
The solicitor in question is reported as disagreeing with the court’s analysis. The firm wasn’t represented at the trial because they had already settled the claim against them so no arguments on their behalf were put forward.
Lawyers have criticised the ruling, pointing out that it was the financial adviser who recommended and set up the loan trust, not the solicitor. Given that the only purpose of the trust was to avoid inheritance tax for the benefit of the beneficiaries it is surprising that the judge didn’t think that the financial adviser owed the intended beneficiaries a duty of care. Since White v Jones the courts have been increasingly ready to impose a duty of care on lawyers to third parties (such as beneficiaries under a will), as well as to their clients, so you might expect financial advisers engaged to advise on estate planning to be viewed in similar terms.
If you are a beneficiary under a will which you think has been badly or negligently drafted then give our free legal helpline a call or send us an email with details of the case for a free assessment.