Kasper is a trustee of the Lantry Charitable Trust. In February 2019, he draws 10,000 of the trust's money (in breach of the trust) and pays it into his own bank account in which he already has 10,000 of his own money. A month later, he bought shares for 7,000 using money from his account. A week later he withdrew 7,000 and bought a car. The next month, he withdraws 5,000 which he gives to his son Ben to use as a deposit on an apartment he is buying.

Realising he is about to be declared bankrupt, Kasper transfers the shares to his daughter, Julia. They are now worth 8,000. On the day he is declared bankrupt, Kasper writes off his car in an accident.

You are required to:

• Advise the beneficiaries of the Lantry Charitable Trust on their position.
• Advise the son and daughter on the gifts made to them.

In your answers you must:

• Analyse the impact of illegality on legal presumptions.
• Evaluate conditions for tracing in law and in equity.
• Appraise the application of the change of position defence.
• Evaluate the rationale for the fiduciary relationship in equitable tracing.

Jurisdiction; england and wales