The collapse of the Scottish law firm WW&J McClure in 2021 devasted the lives of thousands of individuals and families across the UK. Once considered a reliable adviser in estate planning, McClure left a troubling legacy of complex legal entanglements, unexpected tax bills, and financial distress for clients who followed its advice to place property into family trusts.
Here, we aim to explain what happened, examine where affected clients stand today, and offer clarity about the legal and practical lessons we can all learn from this troubling case.
A Promised Shield, a Painful Legacy
For many years, WW&J McClure promoted its “Family Protection Trusts” as a means to protect homes from care fees, mitigate inheritance tax, and streamline the transfer of wealth to loved ones. Clients were assured that by transferring property into these trusts, they could safeguard assets from local authority means testing and potential estate taxation, seemingly a prudent move to secure their family’s future.
What was not always made clear, however, was the legal and financial complexity that such trusts can carry, and the degree of risk involved. Local authorities have wide discretion to scrutinise and challenge financial arrangements they consider to be a “deliberate deprivation of assets.” In reality, many McClure clients discovered that these trusts did not offer the protection they expected. Their properties were still assessed in means tests for care fees. Inheritance tax liabilities were not reduced. The benefits once promised often failed to materialise.
When McClure entered administration in 2021, these issues were compounded dramatically. By this point, the firm had approximately 18,000 clients across the UK, and had named itself as professional trustee on a significant number of trusts – leaving beneficiaries unable to make decisions about property without incurring legal expense and delay. For some, it meant being unable to sell their homes, or needing to pay thousands in legal fees simply to remove McClure’s name from the title register.
The Situation Today
Years after the firm’s collapse, many former McClure clients remain in legal and financial limbo. Some have reported inheritance tax charges of £10,000 or more that were never anticipated. Others are still battling to unwind trusts that were drafted with insufficient clarity or without a proper explanation of the long-term consequences.
Dismantling or rectifying a defective trust – particularly where a now-defunct firm is involved – requires niche legal expertise and can be time-consuming and costly. Jones Whyte, the law firm that took over McClure’s client files, has received criticism for delays in assisting these clients. And whilst regulatory bodies such as the Solicitors Regulation Authority (SRA) and the Law Society of Scotland are investigating various complaints, for many, resolutions remain a distant hope.
The situation has also highlighted the emotional toll such schemes can inflict. Vulnerable individuals, many elderly or living with serious illness, were encouraged to place their trust, and their homes, into arrangements they did not fully understand. These people now find themselves facing additional financial pressure at an already difficult time in their lives.
Why do such schemes go wrong?
At the heart of the McClure collapse lies a cautionary tale about asset protection schemes that are overly complex, poorly explained, or inappropriately applied. While trusts can be legitimate estate planning tools in certain circumstances, they are not a one-size-fits-all solution. When used primarily to try to “shield” assets from care costs or tax without regard to the wider legal context, they often fail.
Local councils are increasingly vigilant in identifying what they view as intentional deprivation of assets. If it appears that a person has moved property into a trust to avoid contributing to their own care, authorities may treat the asset as though it was never given away. Similarly, HMRC may take a view that triggers an unexpected inheritance tax liability. Promises that trusts will “guarantee” protection from care fees or tax burdens are, therefore, highly misleading.
Additionally, professional trustee arrangements can introduce significant complications. When a firm such as McClure collapses, it leaves a vacuum where oversight and authority should be. Unless the trust deeds are carefully drafted, appointing new trustees or resolving a matter becomes considerably more difficult, particularly where property ownership is concerned, and can result in the need for complex and expensive court proceedings.
Lessons to be learned from the McClure case
The McClure collapse serves as a sobering reminder of the risks associated with complex financial instruments like family trusts. Here are the key takeaways:
1. Beware of misleading claims
The trusts offered by McClure were sold as solutions to very real financial concerns, but in practice, they did not live up to these claims. Local councils often challenged them as deliberate deprivation of assets, and they failed to deliver the tax advantages clients had been promised. This highlights the importance of thoroughly questioning and verifying the practicality of any scheme before proceeding. If it sounds too good to be true, it most likely is.
2. Seek independent, expert legal advice
Many clients in this case were introduced through third-party providers, such as funeral planners and building societies. These intermediaries were often incentivised through commissions, which may have encouraged them to make referrals without considering of the suitability of the product. To avoid such conflicts of interest, always engage directly with independent solicitors who specialise in private client law and are equipped to provide impartial advice tailored to your situation.
And remember, reputation matters. Check for accreditations and memberships with respected bodies such as the Society of Trust and Estate Practitioners (STEP). These credentials often indicate a higher standard of professionalism and expertise.
3. Steer clear of aggressive marketing tactics
The McClure scandal brought to light instances where individuals were upsold trust packages they did not request or fully understand. While solicitors must provide professional guidance, the collapse shows the importance of not simply accepting advice at face value, especially if it feels rushed or coerced. If you’re being offered a financial product by a third party or introduced through intermediaries, seek independent advice from a qualified professional unaffiliated with the proposed scheme.
3. Understand the long-term implications
Trusts can be highly effective financial tools, but they are not suitable for everyone. They do not guarantee protection from care fees, and attempts to use them for this purpose may be seen as deliberate deprivation of assets. Additionally, many trusts carry ongoing liabilities such as management fees or inheritance tax, which clients do not fully anticipate.
Setting up a trust requires careful consideration of factors such as inheritance tax thresholds, administrative costs, and the interaction of the trust with local authority rules. It’s essential to understand not just the immediate benefits, but also the long-term obligations and potential risks associated with such arrangements.
4. Be cautious of highly complex financial arrangements
An overly complex financial scheme often carries hidden pitfalls. Simpler, traditional solutions like straightforward Wills or joint ownership arrangements can often achieve the same objectives without unnecessary complications. Always explore these options first before considering more elaborate setups.
Legal recourse for those affected
If you or a loved one has been affected by the collapse of McClure Solicitors, it is essential to seek independent legal advice as soon as possible. An experienced private client solicitor can assess whether the trust in question was appropriate for your circumstances, help unwind or amend it where necessary, and provide guidance on recovering financial losses.
In some cases, there may be grounds to pursue complaints or seek redress. The Solicitors Regulation Authority (SRA) and Law Society of Scotland accept complaints concerning the conduct and service provided by McClure or any successor firm. If financial losses have been sustained as a result of negligent advice, it may be possible to bring a professional negligence claim, though this must be considered carefully and within specific time limits.
Looking ahead: What are the alternatives?
For those planning for the future, the McClure case is a timely reminder of the importance of simplicity, transparency, and trusted legal advice. While trusts can play an important and highly effective role in estate planning, they must be carefully tailored to the individual’s needs and only used with full understanding of the implications.
In many cases, more straightforward solutions may provide greater peace of mind. Lasting Powers of Attorney, lifetime gifting, properly structured Wills, or joint property arrangements can achieve many of the same objectives without the added complexity of a discretionary trust.
The key lies in taking the time to understand your options with a qualified solicitor who places your interests first, free from commercial incentives or high-pressure sales techniques.
How Buckles can help?
At Buckles Solicitors, we have significant experience in advising individuals and families on private client matters, including the review, rectification, and dissolution of complex trust arrangements. We understand the anxiety and frustration caused by schemes that have not delivered what was promised, and we are here to help clients chart a clear and legally sound path forward.
If you believe you may be affected by a defective trust arrangement or would like advice on safeguarding your assets, our team is ready to offer empathetic, expert guidance. We are committed to helping our clients make informed decisions with confidence and clarity.
To speak confidentially with a member of our private client team, please contact us for a no-obligation consultation.
