Alice and Bertie are the beneficiaries of a trust established for them by their father, Chester. They are concerned about possible mismanagement of the trust by the trustees, Doug and Ella, and seek your advice on the following matters, which they have just discovered:
In 2014 Doug received a tip from his friend Racey that a particular horse would win the Derby horse race at Epsom. Doug placed £100,000 of trust money on the horse which subsequently won, earning £400,000 in winnings. Doug placed £100,000 of the winnings back into the Trust’s account held at ‘Nasty Bank Plc’ and paid the remaining £300,000 into his own bank account held at the same bank, where he already held £50,000 of his own money.
In 2015 Doug sold Pretty Cottage, which formed part of the trust’s property, to his sister, Mia, for £10,000.
In 2016 Doug and his wife Tandi went on a round the world trip for two years. Their trip cost £200,000 and was funded from monies held in Doug’s bank account.
In 2018 Doug died and Ella refuses to accept liability for any of the problems outlined above. She claims that she left all the decisions to Doug because he said he had experience of managing trusts.
Advise Alice and Bertie od any breaches of trust and where liability for them lies...