Problems with trustees

Trustees, protectors and other fiduciaries are increasingly likely to face legal proceedings. They may be accused of failing to discharge their duties properly, or are being pursued by creditors of the people who set up the trust. Alternatively there could be problems between them and the trust beneficiaries.

We represent beneficiaries of both domestic and offshore trusts. We act in ‘friendly’ disputes, where the court gives guidance on how best to resolve a particular trust or estate problem, or where the court needs to approve something that is not permitted under the terms of the trust. If the matter cannot be sorted out this way or the parties are ‘hostile’, we prosecute or defend on behalf of our client as necessary.

Withers has been involved in the lead cases where trustees and protectors have been removed, and can advise both sides where this is attempted. In one of Dawn Goodman’s landmark cases, the settlor of a Channel Island trust had appointed as protector a lady who was his financial advisor and friend. However after his death problems arose between the protector and his widow, the main beneficiary. The protector refused to step down unless she was given certain indemnities and costs. We argued that for her to stay would not be in the best interests of the beneficiaries, and would harm the efficient administration of the trust. The Court agreed, removing her without the indemnities she had wanted.

Many of our clients are professional trustees located in offshore trust centers, including the Channel Islands, Cayman Islands and Bermuda, but we also act for trustees based around the world, particularly in the US and UK. In San Diego, Mary F. Gillick has represented many trustees, finding solutions to even the most entrenched problems. ‘Select your attorney carefully, but don’t try to do it alone, especially if you are a family trustee,’ she advises. ‘The way you do things is really critical to how other beneficiaries accept what you do.’

If you have concerns about a trustee, time is of the essence, adds partner Steven Kempster. ‘In many jurisdictions there will be a time limit within which you can bring your claims,’ he explains. ‘If you have some information such as a set of accounts that looks awry, it’s important to start investigating or you may not be able to bring a claim later.’

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03 November 2016 - Article

To join or not join: the role of trustees in Family proceedings


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Recognition

Top ranked firm for contentious trusts

Top ranked firm for private wealth disputes

Top tier firm for contentious trusts and probate

Contentious trusts and estates team of the year (2015-2017)

‘‘

Dawn Goodman and the contentious team at Withers have consistently delivered on instructions to bring clarity and context to our enquiries in a timely manner and on budget, which has been invaluable to our Client Service Directors in running and transitioning a large and diverse client base. We have been particularly impressed with the responsiveness of the team, which is sometimes required to advise on matters across languages and borders whilst acting seamlessly as correspondent to our own retained local advisers. My overall experience has been that for cases with large inherent or potential risks which may become contentious, Dawn’s team at Withers is a go to source of advice and support.

Phillip Ainslie, Technical and Compliance Director - Dominion (Geneva)
‘‘

The team work tirelessly and demonstrate complete dedication to their client’s interests. Always approachable, giving first rate advice, highly effective and results driven. A hard act to follow! 

Dale, Ingrid & Geoffrey

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Track record

The F Trust and the A Settlement (Bermuda)

We acted for the beneficiaries of two trusts in this ground-breaking application under newly-enacted Bermuda law provisions dealing with mistakes by trustees and other power-holders in relation to trusts. Despite the application being contested by the UK tax authority it was successful and the adverse consequences that the trusts had suffered were unwound.

Beneficiary/trustee dispute over luxury brands

We advised a beneficiary of a trust who was in dispute with another beneficiary and the trustee who was holding shares in a luxury fashion brand worth over Euro30m. Court proceedings were ongoing in England and Italy, involving our London and Milan offices, before the trustee was successfully replaced and the other issues between the parties compromised to avoid publicity over the businesses involved.

Defending a Cyprus-based trustee

We are defending a Cyprus-based trustee who faces beneficiary claims of USD$150 million in the British Virgin Islands Commercial Court.

Broadhead v Spread Trustee Company (Guernsey)

We acted for a beneficiary in proceedings concerning trustee negligence in relation to investment losses. It is believed to be the first case in the Channel Islands courts to consider the question of what degree of knowledge will prevent a beneficiary bringing a breach of trust claim beyond the time period required by statute.

The estate of Walter Henchley

Acting for three of the six children of the late Walter Henchley in proceedings concerning two trusts settled in September 1960, our clients sought an order that the sole surviving trustee (or de facto trustee) of both trusts provide an account in common form of his dealings with the trust assets during the period of his trustee.

Offshore trustee in divorce proceedings

Advising a blue-chip offshore trust company on its involvement in English divorce proceedings concerning attacks on trusts worth over £25m. We handled the disclosure issues for the trustee and eventually the case was concluded without the trustee being formally joined to the English proceedings.

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