Annabel is trustee for Bradley (the B trust) and Christa (the C trust). Each trust has £10,000 in it. Annabel takes £5000 from the B trust on 1 June and puts it in her own current bank account at the Royal Bank of Wales which has a credit balance of £2000. On 2 June she takes £5000 from the C trust and puts it in the same account.

a) On 3 June she pays £4000 to Dev to discharge a gambling debt. Dev has long been aware of Annabel’s financial problems, caused in part by her gambling addiction. He chooses not to ask where the money has come from, worrying that she might say it was from the trusts. He spends the money on a fortnight’s holiday in Thailand.

b) Annabel buys a necklace for her best friend, Emily, for £4000 on 5 June. It turns out to be an antique and is worth £8000.

c) Annabel pays £3000 into her current account at the Royal Bank of Wales from a savings account in her own name at Rroid’s Bank on 7 June.

d) Annabel then buys £5000 worth of shares in Crypto-Fortune plc, which operates a crypto-exchange. The shares fall in value to £2000 as a result of the recent turmoil engulfing the cryptocurrency markets.

There is £2000 left in the account. Discuss the potential personal or proprietary claims of the B and C trusts.

Answer rating: 100% (QA)

a For the B trust Annabels withdrawal of 5000 on 1 June would likely be considered a breach of trust ... View the full answer