SDT: child beneficiaries “did not even know” Mr Wilkinson was trustee
A sole practitioner who brought a “cataclysm” upon himself by failing to protect the interests of children when acting as a trustee, leading to them not receiving the legacies they should have done from two wills, has been struck off and ordered to pay £65,000 in costs.
The Solicitors Disciplinary Tribunal (SDT) said the children involved “did not even know” that Timothy John Wilkinson, a private client specialist, was a trustee and “he did not look after their interests at all”.
The SDT went on: “All the way through he fully appreciated that independent advice was absolutely essential and that he could not give it.
“He failed to ensure that independent advice was obtained for the beneficiaries at any point. Nor while minors were they competent to give instructions even if they received independent advice.
“Furthermore the respondent failed to stand down and resign as a trustee when it became clear that there was a conflict between the four beneficiaries, the children on the one hand and their father.”
The tribunal said Mr Wilkinson, who had been with his firm since admission as a solicitor and been a partner since 1974, “had no-one to blame for his predicament but himself”.
Mr Wilkinson’s firm, Burr Sugden, based in Keighley, West Yorkshire, was closed by the Solicitors Regulation Authority last October.
The SDT heard in SRA v Wilkinson (case no. 11311-2014) that the proceedings arose out of the solicitor’s involvement as an executor and trustee of the wills of a brother and sister whose nephew, referred to as RC, was a “lifelong acquaintance” of Mr Wilkinson.
The brother and sister died without having any children of their own. In each case their wills left generous bequests to RC’s children. The brother left an entire farm to RC’s son.
The SDT heard that during the administration of the residuary trusts of the deceased siblings, RC decided to become a tax exile, transfer the assets of both estates to himself and then to companies based in the Isle of Man.
The SDT said the assets were later transferred to a Caymans Island company and then to a Northern Ireland charity company before RC became bankrupt in 2013. Mr Wilkinson acted for the executors and trustees of the estates, for RC and for “various offshore entities” to which the assets were transferred.
“Many of the assets held on trust not only for RC, but, more particularly, for three children were lost by way of sales to clear bank borrowing.”
Mr Wilkinson’s counsel argued that everyone close to RC, including his son, were “convinced that he was honest and intended to build the family estate into a bigger, better and finer entity.
“Also he did not want to pay tax. If to achieve that he had to go away for two years, he decided that was the price he was prepared to pay. There was nothing illegal or unlawful in RC’s desire to pay no tax or
to pay as little as possible.”
The SRA alleged that Mr Wilkinson had acted in breach of his duties as a professional executor and trustee, failed to act in the best interests of clients and acted where there was a conflict of interest. The SDT upheld these three allegations.
Mr Wilkinson was also found to have “compromised his duty to act with integrity” by agreeing to backdate a contract transferring property to RC and sending it to the Land Registry. However, the tribunal said the allegation that the solicitor had acted dishonestly in doing so was not proved to the required standard.
Instead the tribunal upheld the SRA’s allegation that he had acted recklessly. “The respondent researched and recorded the risks all the way along over the years but ploughed on regardless, complying with the instructions of RC and PT [his accountant].”
In mitigation, Mr Wilkinson’s counsel said he had experienced “partnership difficulties” in his professional life, and was now a sole practitioner.
“He would have liked to retire and wanted an orderly wind down of his firm. He had many wills and deeds on his shelves. He was continuing working during the week, until he could sell the firm or possibly merge it with another.”
The SDT described his conduct as “very serious”, although it related “only to one estate in all his years of practice”.
The tribunal concluded: “As to the harm which the respondent’s misconduct had caused, the three child beneficiaries received nothing save cash for their education because the respondent opened the door to their assets passing out of their reach by deferring to the other beneficiary, their father.
“What had happened had a devastating effect on the reputation of the legal profession, where a solicitor had allowed a situation to develop which resulted in three beneficiaries receiving almost nothing and where the trustees came to have no idea of what the assets of the trust were and where the income was.”
The SDT said it was concerned that Mr Wilkinson “showed no insight” and “blamed everyone else including the beneficiaries” for agreeing to transfer the assets to the Cayman Islands company.
“This was a cataclysm which the respondent brought upon himself.”
Mr Wilkinson was struck off and ordered to pay costs of £65,000.
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