McClure Family Trusts Face Proposed Group Legal Action

Addleshaw Goddard is preparing group proceedings in Scotland concerning advice on family protection trusts established by former law firm WW & J McClure, bringing renewed attention to the practical consequences of holding a family home in trust.

In its 12 November announcement, the firm invited potentially affected individuals, relatives and estate representatives to register their interest. It reported difficulties involving property sales, trust administration and the expense of reviewing or ending arrangements.

McClure entered administration in 2021. The proposed action’s website refers to more than 20,000 potential claimants, but that is not the size of an accepted court group or a finding that every trust was defective.

The proposed claims concern allegations about professional advice. Liability has not been established by these proposed proceedings, and eligibility and outcomes remain subject to legal assessment and the court process.

Registering an interest is the start of an assessment

The Scottish Courts and Tribunals Service describes group proceedings as a procedure requiring permission to proceed in the Court of Session. An invitation to register should therefore be distinguished from a court determining the merits of a claim.

Families considering participation should obtain the legal team’s explanation of eligibility, funding terms, evidence requirements and any relevant deadlines. The registration route linked from Addleshaw Goddard’s announcement is separate from a property-finance enquiry.

For a family already planning a move, there may also be an immediate transaction to manage. Seeking advice on possible redress and establishing how the property can lawfully be dealt with are related but distinct tasks.

Living in a home does not establish the authority to sell it

Government guidance on trusts explains the roles of the person establishing the arrangement, the trustees and the beneficiaries. Trustees hold and manage assets under the trust’s terms, while beneficiaries may have rights to income, capital or both.

A family’s everyday understanding that a house is “ours” may therefore differ from the arrangements a solicitor must address on a sale or mortgage. A beneficiary’s interest, or permission to occupy, should not be assumed to give that person authority to sign the transaction documents.

The review starts with the trust deed, subsequent amendments, trustee appointments and the property title. It should establish what was actually transferred and what powers and obligations apply now. The description “family protection trust” alone does not answer those questions.

A proposed sale needs a clear route through the legal requirements

For property in England and Wales, HM Land Registry’s guidance on private trusts of land explains how trustee powers and restrictions can affect registration of transactions. A restriction is not, by itself, evidence of a defective trust, but its requirements must be considered in the conveyancing process.

The solicitor should establish who must act, whether consents or other steps are needed and how sale proceeds are to be held or applied. The family should also confirm whether those proceeds can fund the intended next purchase in the ownership structure it has in mind.

Scotland and Northern Ireland have different property and trust-law arrangements. The location of the proposed group proceedings does not determine the conveyancing rules for every home involved. Advice needs to cover the relevant jurisdiction and trust terms.

Borrowing adds a lender’s assessment to the legal review

Where a mortgage is contemplated, the first question is whether the proposed borrowing and security are legally permissible. The next is whether a lender accepts the arrangement, the parties involved, the use of funds and the property’s occupation.

Those are separate decisions. A solicitor confirming the relevant powers does not guarantee a mortgage offer. Equally, a property’s substantial value cannot overcome a restriction on charging it or uncertainty over who has authority to act.

The finance assessment should identify the proposed borrowers and security providers, whose income will service the debt, existing liabilities and the repayment plan. It also needs to establish who lives in the property and how their rights affect the proposed security.

Tax and care-fee assumptions need their own advice

STEP’s guidance on asset protection trusts warns about arrangements marketed around care fees and potential tax consequences. It is not safe to assume that transferring a home into trust removes it from every relevant assessment or produces the intended tax result.

Nor should a trust automatically be ended because a family now wants to sell or borrow. The consequences of retaining, amending or terminating an arrangement need to be compared by the appropriate legal and tax advisers.

The finance adviser’s task is to assess borrowing within the legally established position. A loan does not resolve disputed advice, remove trust restrictions or replace a decision about whether a proposed transaction serves the trust’s purposes.

Death, incapacity and trustee changes can affect the timetable

A transaction may arise when an original trustee has died, a family member can no longer manage their affairs or an estate is being administered. The professional team should establish who is entitled to give instructions and what evidence is required.

Being an executor, attorney or beneficiary should not be treated as interchangeable with acting as trustee. The solicitor needs to identify the capacity in which each person acts and whether appointments, documents or registrations need updating before the intended transaction.

These questions belong near the start of the timetable. An agreed sale date or expiring mortgage offer can become difficult to meet if authority and documentation are investigated only after a transaction has been negotiated.

Recover the records before relying on a summary of the arrangement

The Solicitors Regulation Authority’s McClure guidance says former clients or their representatives can ask Jones Whyte in writing for the return of their file. It also makes clear that clients are not obliged to retain that firm for ongoing work.

That guidance focuses on former clients of English and Welsh offices and directs Scottish-office clients towards the relevant Scottish bodies. Its published update is dated 13 August 2025, so it provides background rather than a new announcement about the proposed proceedings.

A useful transaction file includes the deed and amendments, title information, trustee changes, relevant correspondence, existing finance documents and the family’s intended next step. An adviser should work from those records rather than a sales brochure or recollection of the original explanation.

Keep legal redress and property finance as separate decisions

The SRA distinguishes service complaints from potential negligence claims and provides information about different redress routes. Families should ask their legal adviser which process is appropriate and how any claim interacts with work needed on the trust itself.

Expected compensation should not be treated as an assured source of mortgage repayment. If a finance proposal depends on the timing or success of litigation, that uncertainty must be made explicit and addressed with the relevant advisers and lender.

For private-client solicitors and tax advisers, the useful finance conversation begins once there is sufficient clarity about ownership, powers and the proposed transaction. It may concern a purchase, an authorised refinance or funding needs arising after a legally advised reorganisation.

The next step is to establish what the family can lawfully do

Trusts have legitimate uses, including managing assets for beneficiaries and providing for family members. The proposed McClure proceedings do not establish that every trust-owned home is unsaleable or incapable of supporting borrowing.

They do underline the importance of reviewing the documents before making assumptions about access to property wealth. Willow can assess a legitimate financing requirement alongside the client’s solicitors and tax advisers, with any proposal conditional on clear authority, acceptable security and a sustainable repayment plan.