Estate Planning: Where Paperwork, Intention and Reality Mucst Align

A recent High Court ruling involving a disputed £5 million property portfolio serves as a powerful reminder that estate planning is not about creating documents that say what you hope is true. It is about creating structures that genuinely reflect ownership, intention and reality.

In Gabriela Teixeira v Moaven, the High Court was asked to determine whether a series of declarations of trust signed shortly before the deceased's death had the effect of reducing the value of his estate.

The properties in question had been registered in the sole name of Abbas Moaven, a successful London property investor and restaurateur. However, shortly before his death in 2012, declarations of trust were signed suggesting that the properties were actually owned in equal shares by Abbas, his brother and their mother.

The practical effect of those documents was significant. If valid, they would dramatically reduce the value of the estate available to Abbas's wife and children.

After a detailed examination of the evidence, the court concluded that the declarations of trust were a "fiction" and a sham. The judge found that the properties had always belonged beneficially to Abbas and that the documents were designed to create the impression that his estate was much smaller than it really was.

As a result, properties worth an estimated £5 million were restored to the estate for the benefit of his widow and children.

What makes this case particularly interesting is that it was not simply about inheritance.

It was about evidence. The court was not interested in what the paperwork said in isolation. It examined the underlying reality. Who funded the properties? Who controlled them? What was the genuine intention? What actually happened in practice?

The answers to those questions ultimately mattered more than the documents themselves. This case highlights several important principles that we regularly discuss with clients:

• Ownership and control matter more than labels;

• Documents alone do not create legal reality;

• Last-minute planning is subjected to far greater scrutiny;

• Family arrangements that are not properly documented create significant risk;

• Structures designed to create appearances rather than genuine outcomes are vulnerable to challenge.

Perhaps the most important lesson is that good estate planning should withstand scrutiny long after the documents are signed. Too often people assume that if a declaration, agreement or trust deed exists, the planning is complete.

The courts continue to demonstrate that this is not the case. A document is only one part of the picture. The surrounding evidence, conduct, intention and implementation are equally important.

The judgment also contains an important observation regarding professional estate administration. The court recognised that independent administrators cannot always remain passive where there is evidence that assets may have been diverted away from an estate.

Sometimes protecting beneficiaries requires active intervention. At iTrust121, we believe estate planning should be built around genuine structures with genuine substance. A trust should not exist merely to create an appearance. It should reflect a real transfer of rights, responsibilities and intentions, properly documented and professionally administered.

"The most common misconception I encounter is the belief that estate planning is primarily about producing documents. In reality, effective planning is about creating arrangements that remain robust when challenged by beneficiaries, creditors, HMRC, professional advisers or ultimately the courts."

The Teixeira case is not simply a dispute about property ownership. It is a reminder that the strongest estate plans are those where the paperwork, the intentions and the reality all point in the same direction.

Good planning should still work when someone starts asking difficult questions. If it only works while nobody is looking closely, it probably was not good planning in the first place.

James Berkeley

Senior Counsel

iTrust121