When Angus and Agnes McFarlane put their home and investments into asset protection trusts, they thought that their money would be protected for their children.
But since their death in 2022, their daughter Joan, 66, from Troon in South Ayrshire, has spent more than two years settling the estate, paying what she said was £40,000 more than she would have if the trust had never existed.
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“It’s galling that a large part of the inheritance has just disappeared,” said Joan, whose parents used the Glasgow-based law firm WW&J McClure.
Families are increasingly turning to trusts in the belief they can save inheritance tax and care home fees. Around 121,000 trusts were registered in the 2024-25 tax year, up from 115,000 the year before, according to HM Revenue & Customs (HMRC) data. it means there are now an estimated 835,000 set up in the UK.
But many do not stand up to scrutiny from the taxman or local authorities. The Association of Lifetime Lawyers, which helps older and vulnerable people, found that 95 per cent of its members had seen clients who felt they had been mis-sold trusts in the past 12 months in the past 12 months by various companies.
The case of WW&J McClure is a warning of how badly trusts can go wrong. Last month the Solicitors Regulation Authority said the firm had set up about 22,000 trusts for clients, often containing their homes. It went into administration in 2021. Most of these clients were elderly and spent thousands of pounds setting up trusts. Many claim that they were never given the protections they understood they were paying for.
The Sunday Times found that
Many McClure clients said they were promised that a trust would protect them from care fees, probate costs, inheritance tax and capital gains tax. Instead they were landed with unexpected bills for thousands of pounds
Surviving family members claimed they have struggled to sell homes or access their inheritance, spending thousands to dismantle the trusts
They are in discussion to bring cases against WW&J McClure and those linked to it
Experts warned there are still many other firms mis-selling trusts which have yet to be uncovered
The trusts
An asset protection trust, also known as a family protection trust, puts the ownership of an asset — anything from investments to property — into a trust run by appointed trustees.
While they can be worthwhile, such as for those who want to give away assets completely while retaining no benefit for themselves, they are not suitable for many people.
Agnes and Angus McFarlane
In 2019 Angus, then 87, and Agnes, 80, said they were persuaded by a financial adviser to pay £8,000 to set up two trusts with McClure, holding their £265,000 home and £150,000 of investments.
The couple claimed they were promised it would shield them from care fees and help their estate avoid capital gains tax (CGT) after death.
Instead the estate incurred a £32,000 CGT bill on the amount their assets had gone up in value from the time they were put into the trusts. There would have been no CGT to pay if they had not used the trusts that their children had to pay an extra £8,000 in legal fees to unwind.
An investigation by the Scottish Legal Complaints Commission, a public body that resolves disputes, found in February that McClure’s service had fallen below the required standard.
“It seems predatory; my parents were sold it in the belief that it would protect their assets and give us an easier and less expensive route to our inheritance. It was all complete nonsense,” Joan said.
McClure trusts
McClure’s 22,000 trusts were mainly sold by third parties, from funeral directors, charities and financial advisers to high street banks and building societies. In many cases, these third parties provided advice about the product and were paid a finder’s fee by McClure.
“There was no bespoke advice. If there were, it would have made clear that these trusts were not appropriate for many people who set them up,” said Claire Springle from the law firm Springle & Co Solicitors, which has helped 40 clients unwind McClure trusts.
While it has been alleged that those selling trusts for McClure claimed that they would help to avoid probate and cut CGT and inheritance tax bills, the biggest sales pitch was apparently that they would reduce fees if the clients needed care.
If your assets are worth less than £23,250 (£36,750 in Scotland or £50,000 Wales) you may be entitled to have some or all of your care home fees paid by the local council. The family home is usually included when assessing someone for state support, unless a spouse or dependant still lives in the property once you move into a care home.
Empty promises
Alex Stanier from the law firm Allan Janes said that trusts could not live up to those promises: “Trusts can incur much higher tax rates than estates and are significantly more complicated to administer.”
For an asset to be outside of an estate for inheritance tax purposes the person giving it away cannot continue to get any benefit from it — for example, you cannot put your home into a trust and continue to live there.
Stanier said: “If you live in a trust-owned house, without paying rent, it is considered a ‘gift with reservation’, meaning that it will still be counted as part of your estate when you die. Worse still, such trusts often mean that valuable personal inheritance tax allowances are lost.”
Putting a property into a trust almost always means that you lose the extra £175,000 inheritance tax-free allowance that you are eligible for if you leave your main home to a direct descendant, on an estate worth less than £2 million. Everyone gets a £325,000 main inheritance tax-free allowance. Civil partners and married couples can pass on all assets to each other tax-free and can also inherit each other’s allowances.
When it comes to care fees, a council is likely to charge you anyway if it finds that you have engaged in the “deliberate deprivation of assets”, such as by putting your home into trust.
And councils are increasingly cracking down. Earlier this year, the Sunday Times revealed that more than 1,000 families had been pursued by local authorities in the last three years over suspected deliberate deprivation of assets.
Paul Pygott, 67, from Barnsley, said he was forced to pay £26,000 to his mother’s care home after her death, despite promises that the trust his parents set up with McClure would mean they were not liable for the fees.
Stu and Ivy Pygott
His parents, then 79, were sold the trust in 2009 through the Nottingham-based Will Writing Company, which collapsed in 2018, after being introduced through their local branch of the Leeds Building Society. Leeds said only a small number of customers were referred to McClure by The Will Writing Company.
The couple put their £125,000 bungalow and £30,000 of savings into two trusts and said they were promised that they would not count as assets in the council’s financial assessment.
Pygott claimed that when his mother died in 2020 after a year in care, Leeds city council told him that it was a “sham trust” used for the deliberate deprivation of assets — and demanded that he pay her fees.
“It has left me not trusting solicitors,” said Pygott, who also had to pay more than £6,000 to unwind the trust. “The two years sorting this were the most stressful of my life, every time the phone rang, I thought something else had gone wrong. My mum and dad thought they had done the best for their family. They’ll never know the mess that was left.”
Still making big money
Mike Pilbeam from the Victims of McClure Gateway 2 Justice campaign group estimates that homes worth a total of £4 billion could have been placed in McClure trusts.
The group has found that McClure solicitors were appointed as professional trustees on many of these trusts, in some cases, it is believed, without the knowledge of their clients. Often the same four solicitors were appointed.
Pilbeam, who has spoken to more than 200 victims, said this could mean that some solicitors will be trustees of up to 9,000 trusts. Former McClure staff remain trustees even after the death of their clients and charge families for their signatures to close the trusts.
Springle said: “Given the number of trusts involved, they could be making considerable sums from those seeking to regain control of their assets.”
The SRA said it had gathered evidence on a range of issues involving McClure but because the former directors were no longer on its roll, was unable to take action against them. Evidence has, however, been kept on file.
Former firefighter Martin O’Brien has not received any money seven years after inheriting his godmother’s flatTIMES PHOTOGRAPHER Richard Pohle
‘Someone else is in control of my inheritance’
Martin O’Brien, 63, from Portsmouth, and his children inherited his godmother Mary McGrath’s flat in Ruislip, west London, when she died in 2019. Seven years on and they have received nothing.
McGrath was 92 and registered blind when the funeral director Golden Charter sold her the trust in 2018. McGrath believed it would protect her from fees if she needed care and reduce probate delays.
She died the following year and while O’Brien is listed as a beneficiary of the flat, one of the company’s former bosses is a trustee, giving him ultimate control of its sale. He has listed it with estate agents and tried to sell it at auction, with no interest.
O’Brien claims he has not heard from the trustee since December, and does not know if the house is still on the market. Meanwhile, the amount owed in service charges grows. O’Brien said that in 2023 the outstanding ground rent and service charge for the property was £20,000, and is now likely to be far higher. The bill will have to be paid by the estate.
“That money would have really helped my two children and me; now I’m numb to the fact that we probably won’t get anything because of these outstanding bills,” said O’Brien, a retired fireman.
Golden Charter said that it could not discuss individual cases due to client confidentiality. It added: “From 2012 to 2018, we offered family protection trusts where the legal work involved in the set-up was managed by McClure’s solicitors.
“We had no ongoing role after the trust was set up, however, we can confirm that customers were provided with all relevant information during that time to ensure that they were well-equipped and capable of making an informed decision.”
When McClure went bust in 2021 administrators blamed Covid for an unsustainable drop in income. Its staff and more than 110,000 cases were transferred to the Glasgow-based law firm Jones Whyte.
In January 2025 the Solicitors Regulation Authority said the handover process had not been carried out to the required standards and that some clients had yet to be contacted.
Annette Riding from the Victims of McClure Solicitors Facebook group said: “Unfortunately many people have and will die before being notified by Jones Whyte that a trust had been set up — leaving their bereaved family to resolve the situation.”
Jones Whyte said it recognised that many McClure clients had experienced uncertainty and frustration after its collapse, but that the circumstances surrounding many trusts were often complex. “We committed significant financial and staffing resources to supporting the clients of McClure and continue to engage constructively with the SRA regarding these matters.”
Jade Gani, the chairwoman of the Association of Lifetime Lawyers, said “McClure is not an isolated incident but the tip of the iceberg. There are lots of other companies selling similar trusts.”
The Victims of McClure Solicitors group said it was in discussions with solicitors to bring legal proceedings against the company and those associated with it. Riding said: “Many have paid thousands to resolve these trusts, others have been subject to capital gains tax, and some have paid inheritance tax that would not otherwise have been due. These people need justice.”