A well respected influential legacy body argue that proposals put forward by the Law Commission for reforming wills need to urgently address the impact of technology.
In a consultation response to the Law Commission, the Institute of Legacy Management, the membership body for legacy professionals – those responsible for the successful and sensitive administration of donors’ final gifts to charitable organisations, said the Law Commission ‘seems to defer’ all conversation on technology and that the issue needs consideration as the growing trend towards writing wills through technology is already affecting the probate process.
They stated that their consultation highlighted several areas the Law Commission should be looking at with a greater sense of urgency, expressing a concern about the consultation’s approach to the impact of technology. They stated that the commission has failed to acknowledge and promote discussion around the challenges being felt by technology, and that the distribution of digital assets increasing role of technology in the drafting, execution and the storage of wills and the rising number of unregulated providers in this area gives their members cause for concern now.
The consultation suggested that the Lord Chancellor should be given the power to introduce fully electronic wills by statutory instrument, but it warned that it does not ’specify a timeline or the level of public consultation this would involve’.
Institute of Legacy Management chief executive Chris Millward said: ‘The consultation seems to defer all conversation on technology in the will process, suggesting it’s a future problem. But we know that people writing wills online is having an impact now and requires considerable consideration, fast.’
‘Our members are already seeing the consequences of wills made online, and as we become more reliant on technology, this is likely to increase We can embrace technology while retaining essential safeguards and standards to make sure such wills are legally robust and vulnerable people are protected.’
Millward said tighter regulation and standardisation of online will-writing platforms would help achieve this, an idea solicitors have also backed.
The consultation closed last week and the Law Gazette revealed that this had been one of the Law Commission’s most engaging consultations ever.
Anyone drawing up their will should think carefully before appointing a solicitor as an executor as they can often charge crippling fees.
A recent article in The Times provides damning evidence that solicitors can charge exorbitant fees to act as executors. One of their readers found himself powerless to stop his father’s estate, worth £300,000, being stripped of more than £115,000 in legal fees.
After their father’s death Paul Cutler, 47 discovered that his father had appointed a solicitor as executor of his will. The solicitor then chose to appoint the legal firm that he worked for, Blake Morgan, to handle probate.
As a beneficiary of the will, Paul complained to Blake Morgan that the probate costs were spiralling, and was told that only the “client” of Blake Morgan, that is the executor (Blake Morgan’s employee), was able to complain, despite the obvious conflict of interest.
The outrageous costs included £90,000 being charged to administer assets, primarily two small properties, and about £4,000 for fees to pay utility bills, some of which were not paid on time, resulting in late payment penalties. Work was undertaken on an hourly rate, with expensive senior staff used to oversee the most simple of tasks. An incredible 18 members of Blake Morgan’s staff billed for their time in administering the small estate.
A spokesman for Blake Morgan, whose company slogan is “Making A Difference” said: “We recognise that the fees charged in the administration of this estate were substantial. They reflect the complexity of the issues encountered in the administration. We responded to a complaint made by the beneficiaries under our internal complaints process. Following a review of the file it was concluded that the fees charged were reasonable for the work done.”
After lodging a complaint with the legal ombudsman, Mr Cutler says he was told that the ombudsman did “not have the power to override the executor’s discretion and to say that the costs incurred were not appropriate, if the executor has decided they are”.
Mr Cutler said: “It was a surprise to learn that only the solicitor acting as executor, an employee of his legal firm, could say that the estate had been overcharged. Clearly it would not be in his interest to do so. The solicitor also gave his firm power of attorney over his executorship. This meant the partners were acting as the executor [client] and the solicitor [for the client] determining the fees that should be charged.”
Rob Sendall of Lifetime Legal, which offers affordable legal services from a panel of solicitors, says: “Some solicitors systematically encourage clients to appoint the firm as executor, without explaining that this appointment gives them absolute power over the administration of the estate and ultimately the fee that is charged.”
The Law Society sets out guidelines for solicitors who wish to appoint themselves or their firm as executors in a will they are drafting. It states: “You must not exploit your client’s lack of knowledge for your own advantage by leading the client to believe that appointing a solicitor is essential or indeed the norm.”
It goes on to outline that there “may be no advantage where, for example, the estate is small or straightforward . . . and the client should be advised accordingly.”
Chun Wong, a partner at Hodge Jones & Allen, an expert in civil disputes, says that a solicitor acting as executor owes a fiduciary duty of care to act in the beneficiaries’ best interest, and will have to decide if there is any potential conflict with using their own firm.
“While it is the norm for solicitors to do this, the duty to the beneficiaries must outweigh the commercial benefit to the firm. In most cases you’d expect fees to work out at between 1 per cent and 2 per cent of the value of an estate.”
Blake Morgan certainly follow their slogan of “Making a Difference” by somehow managing to charge over 30% of the value of the Mr Cutler’s father’s estate.
Readers of The Times were quick to comment online on these exorbitant fees, using terms such as professional gold-diggers and crooks. Here we reproduce just a few of the comments.
Richard Smith echoes the view of many by saying: “Never appoint the solicitor who draws up your will to be your executor. This common practice should be outlawed as a grossly unprofessional conflict of interest. The only reason for it is so that the lawyer’s firm can benefit unchallenged from the subsequent fee income from administering the estate.”
Richard M said: “I thought solicitors’ fees could be “taxed”/assessed by the Law Society. But if that is now the Legal Ombudsman process, as referred to, and he can do nothing, the answer is simple -don’t have the solicitor as executor. Really disgraceful.
Mr Ogilvie said: “The idea of appointing a solicitor firm to do as they like (because I will be dead and unable to supervise their work) is horrific.”
Wyn Ford said: “As a result of this article, my draft will shall be amended to remove the law firm as executor.”
Rue de Remarques said: “How solicitors justify fees of the size mentioned is a mystery and a scandal.”
Tim Chilton said: “I’ve just completed probate on my mother’s estate of similar size and complexity. It is simple logical and straight forward. My only direct cost was the £220 probate fee.”
Irene Brown said: “A solicitor drew up my will several years ago and I appointed his firm as executors. On Monday I shall be drawing up a new will myself and appointing my son as sole executor to ensure that he will not be ripped off.”
David at Wateroakley said: “To remind me never to use a solicitor to draw up a will and be nominated as the executor, the statement of account for my Grandmother’s estate is framed for posterity. Due to the stupidity of the solicitor’s wording of the will, and his subsequent intransigence, the estate took 15 years to be settled. The solicitor’s fees funded his lifestyle for many years, and the money from the estate he spent on wholly unnecessary disbursements helped his mates in the local business community. By which time the sole beneficiary had died three years earlier.”
David went on to say “An estate is a source of regular fee-income for an intransigent executor.”
Vincent Green went as far as to comment “I would say they are crooks.”
Anthea Rogers said: “You do not have to use a solicitor for the majority of the work. Much of it is simple administration and for the more complex tasks you can either ask HMRC for help or employ a solicitor to perform specific tasks that you cannot or do not wish to. It is very distressing to see a firm unable to perform basic tasks without error. For me, that smacks of lack of professionalism – if you can’t carry out the work without spelling mistakes in documents and errors on HMRC forms, then should you really be charging £250 an hour?
Malcolm Slade with his tongue firmly in his cheek commented “Solicitors ripping people off? Who’d have thought it?”
Voice of the Voyager said: “Those who make the law of the land need to review such incestuous relationships between those drawing up such documents, and also transacting them. With 27 years in the finance world, I have seen it all. You do not need a solicitor to transact probate, it is easily done and the probate office are extremely helpful. If you need some legal work undertaking, employ a law firm to do that specific piece of work, not the whole estate. I also believe the ‘free will month’ is the loss leader to look to do good in the community and smiling faces in the local paper, but it is the golden opportunity to insert little time bombs into wills, for the probate to be picked up later down the line.”
Philip Anthony Hatton said: “When my mother died last year, my brother and I were the executors of her will. We registered her death and the registrar suggested that we could handle the probate ourselves, as we had a good record of the accounts and assets. I did this and it went very smoothly. It turned out to be very good advice.”
Dr Elaine Arnold said: “I agree. I did the probate for both of my parents’ estates -of around the same sort of value as above. It is really not much more difficult than doing tax forms and you can get help/info on-line. The biggest work is just finding all the papers/documents if your relative wasn’t so organised in their later life – and solicitors can’t help with that.”
Michael T said: “October in each year is Free Wills Month. Participating solicitors will draw up a simple will free of charge. The idea of a solicitor doing something for nothing might cause some people to raise an eyebrow. But I am sure that there they are all acting entirely altruistically. However, there is little money for solicitors in drawing up the Will. The real money is in probate. I wonder how many solicitors participating in Free Wills Month suggest to the client that the firm of solicitors might be the executor of the Will.”
I remain surprised at how many intelligent people appoint the solicitor as the executor. This is despite well-publicised reports of the fees that are charged by solicitors and the difficulty in removing them or challenging those fees.
Many solicitors charge by time, often in 6 minute blocks of time. So if the beneficiaries phone them up, this is likely to be logged. It is not difficult to see how fees of thousands of pounds could be racked up.
So the answer is simple. Do not appoint the solicitor as the executor. Appoint some trusted individuals and they can, if they so choose, hire and fire a solicitor. They might also find that they can carry out many tasks themselves.
Peter Levinger said: “One issue I have witnessed is that on many occasions a Client appoints a Solicitor because they have a personal relationship. On the Clients death the Probate is passed to the firms Private Client Department and the actual Executor ends up charging hourly fees for “rubber stamping “ other people’s work in their own firm”
Andrew Rossiter said: “The very definition of Racketeering”
EnglishRose said: “Don’t appoint the solicitor and I write that as a solicitor. When he died my father had unbilled solicitors’ work and it was very hard to disprove. I cannot believe how bad some firms are.”
The final word goes to Peter Wright who stated: “97% of solicitors give the rest a bad name.”
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