The lot of a personal representative can be an unhappy one if beneficiaries do not understand all the

In most cases the relationship between the solicitor personal representative (PR) and the charity beneficiaries begins when the client first gives the potential solicitor PR instructions for their will. Charities are usually residuary beneficiaries because the client has no immediate family or friends, and similarly solicitors are often invited to become executors. The relationship between the client and the potential solicitor PR may have been built up over many years and the client will have immense trust in their solicitor to carry out their wishes sympathetically, efficiently and often personally.

Apart from ensuring a validly executed will the solicitor should be clear on the exact identity of the specific charity and refer to its charity registration number in the will. Care should be taken to avoid unincorporated associations being confused with charities (and the consequent IHT issues), or indeed ambiguity over the exact identity of a charity. One should ascertain the client’s wishes if the charity should amalgamate or cease to exist.

Which charity?

Practitioners are often aware of the client who wants to benefit ‘blind charities’ or ‘cancer charities’ generally, but does not know which specific charity to favour. Clients do seek the views of their solicitor and potential executor when choosing which charities to benefit. The dilemma between helping smaller local charities and the larger national and well known charities is common and often discussed.

The more that a solicitor knows about a charity, its workings and its effectiveness, the more they can advise and assist the hesitant or inquiring client in making provision in their will. A well informed private client solicitor is just as much an ambassador for a charity as their own publicity team. Charities should work with solicitor PRs in responding promptly to requests from putative donors about whether terms and conditions can be attached to a gift. Solicitors should not feel afraid to approach charities, with the client’s consent or on a no-names basis, at the will making stage to clarify matters and avoid doubts later. Practitioners need to react sensitively to clients who think that their 1950s bungalow might be preserved by The National Trust, or that their Russell Flint print may be exhibited in the Tate Gallery. Tact and diplomacy, as well as much patience may be needed when trying to make a clear unambiguous will for the charity benefactor.

How personal should the representation be?

Solicitors should take clear instructions from the client about what the client expects the solicitor PR’s role to be at the time of death. Make sure you have all the information you need to register the death, arrange the funeral and dispose of the body or ashes. If the funeral arrangements are particularly unusual or likely to be particularly expensive then keep clear notes of those instructions to counter any questions of unreasonableness later. Be pro-active in discussing this with your client and make sure that a clear checklist of who needs to be notified can be easily located, and that the client wishes all these costs to be taken from the estate. In addition if the testator wishes to leave certain chattels to individuals then make clear who shall bear the cost of transportation.

During the lifetime of the client the solicitor PR can often become familiar with their financial affairs, perhaps even acting as attorney and will have personal knowledge of the way in which the donor wants their estate administered, and their effects cleared. Clear file notes, methodical files and recording key information will all help in making the subsequent estate administration straightforward.

The death itself and the immediate period

The death

After registering the death and arranging the funeral the solicitor PR’s key duties are:-
1) to collect in the assets of the deceased;
2) pay off the debts and liabilities;
3) work out who is entitled to the remainder; and
4) distribute it correctly and promptly.

Section 1 Trustee Act 2000 imposes a statutory duty of care on solicitor PRs to exercise reasonable skill and care with regard to:

1) any special knowledge and experience the PR has held himself out as having;and
2) any special knowledge and experience which would be expected of a professional trustee acting in the course of that kind of business or profession. That is a significant duty of care and charities will want to see that it has been discharged properly and at reasonable cost.

Not all our clients conveniently die between 9am and 5pm Monday to Friday in their own immaculately maintained home, immediately adjacent to one’s office, with every piece of paper alphabetically filed away in a filing cabinet just inside the front door.

The deceased may have lived alone, accumulated a substantial amount of belongings and paperwork, which needs to be carefully sifted. Some clients even want personal (and often sensitive) papers specifically destroying by the solicitor PR personally, but make sure the charities are aware of this higher level of care. Legacy officers are not psychic and whilst the solicitor may be intimately familiar with all the work that has to be done on the death of a specific client, charity officers will not be. Communication has to be a paramount concern and file notes need to be specific and meticulous.

For those practising in rural areas a death in the local major hospital may involve at least a 50 mile round trip. The whole process of attending at the hospital, collecting the belongings, registering the death and dealing with the undertaker may well take a full working day of chargeable time, but if this is not made clear at the outset then challenges to the solicitor’s bill of costs may result.

Clients who die at home do so at inconvenient times usually requiring the immediate attendance of the solicitor PR out of office hours. While there may be neighbours and friends who are willing to help, the responsibility nevertheless falls on the solicitor PR and charities will not look kindly on solicitors who fail to discharge that duty of care and allow assets to ‘go walkabout’. Remember that the deceased may have left keys with neighbours, carers and friends so changing the locks quickly or securing all the keys is paramount. Notifying insurers, or indeed actually arranging insurance is an urgent necessity. Solicitor PRs should consult with the local police or neighbourhood watch co-ordinator as well. The deceased’s pets will need re-housing and often have to be caught first! Dogs Trust will collect any pet (and not just dogs) that needs to be re-housed but this may need additional chargeable time for the solicitor PR.

Practitioners should tell charity beneficiaries concerned of the death immediately: not only is it polite but the charities may well want to send a representative to the funeral –especially so if the bequest is substantial, and the charity has a local representative. Aside from showing respect, it will also reflect well with the other mourners, and enhance the charity’s standing in the community. It also helps the solicitor PR bond with the charities concerned at a very early stage.

It is important to make charities aware, as soon as possible, of the time and effort that is being expended. Elderly single clients benefitting charities as residuary beneficiaries often have accumulated houses full of furniture and belongings and their filing system may be idiosyncratic to say the least. While solicitor PRs have the power to employ agents and pay them (s.23 (1) Trustee Act 1925) it is unwise for the solicitor PR to simply delegate the house clearance to agents, however trustworthy, without first conducting a careful search of the deceased’s belongings. Solicitors may well have to spend many days simply shifting mountains of accumulated post to locate share certificates etc. Two colleagues recently spent over 20 hours sorting the contents of a two-bedroomed flat where the deceased’s filing system comprised innumerable plastic carries with contents as assorted as investment certificates, old newspapers, shopping lists, utility bills and cuddly toys. In that example my firm sent the charities digital photographs of the state and condition of the interior of the deceased’s property to show the task that faced them.

Ex gratia gifts

The question of chattels often causes solicitor PRs concern: again tact and diplomacy are essential. Often charities appear insensitive about allowing family members, neighbours and friends ‘keepsakes’ or ‘family items’, and yet if approached properly charities may be willing to make ex gratia ‘gifts’. Practitioners should be cautious though in ensuring that such items have been properly valued and the charities advised accordingly. If the residuary beneficiaries have local charity shops then get them involved in clearing the property.

The medium post-death period

As soon as is reasonably practicable, and certainly within four months of death, the PR should ensure that all charities receive a full copy of the IHT 400 or a schedule of assets and liabilities, backed up by valuations, plans, and back-ground information if matters are not self evident. The use of digital photographs to appraise non-local charities of any specific issues such as property defects, unusual chattels and so on is to be commended. When submitting recommendations as to the sale of properties remember the provisions of s.36 Charities Act 1993, and do not be afraid to appraise the charities of local peculiarities in the market.

Where solicitors are dealing with a number of charitable residuary beneficiaries not all respond promptly and efficiently to requests for information or instructions. When sales of properties are involved, it is not unreasonable to expect charities to respond within one working day to offers submitted and practitioners should make this clear when setting forward what is expected from the charities. In this age of electronic communication there is little excuse for delay in responding to requests for instructions.

Where other requests for instructions are made it is not unreasonable to expect the charities to respond within 10 working days, even if it is a holding response. There is nothing more irritating, from both sides, than lack of communication. Both solicitors and legacy officers are busy, get ill, have maternity leave or even go on holiday but the lack of prompt responses does little to foster a good working relationship. Build a rapport on both sides by using the telephone or e-mail regularly, and if the opportunity arises even meet personally with legacy officers, or a charity’s local representative.

The donor will have chosen a charity because the donor expects the charity to maximise benefits and while charities may want to take some independent advice legacy officers need to bear in mind that in the vast majority of cases solicitor PRs will know far more about the deceased, the estate, and the local area and are of course obliged to act in the best interests of the estate and will therefore be looking to maximise value in any event.

Completing the administration

Clear logical and straightforward estate accounts should be prepared and submitted for approval along with all supporting documentation, time sheets, forms R185E and a concluding report on the administration. It is better to supply too much information than too little as that may lead to unfounded criticism and extra work.

Costs

This is the most contentious area between charities and solicitor PRs. Often it could be avoided by better communication from the moment of death. Experienced practitioners may know at the commencement of a matter just how much work will be involved so tell the charities, and the more so if something unusual or complex is going to be involved. Ensure that the firm’s terms and conditions of business and retainer letters are clear and unambiguous as to costs to be charged, the scope of work and whether a value element is being applied, as is permissible following the decision in Re Gemma Trusts. 

The excellent ILM Probate Section Handbook, Charities as Beneficiaries, says ‘fees of up to 4 per cent to 5 per cent of the gross value of the estate on a medium sized estate will cause relatively few problems.’  Yet some charities subscribing to the ILM do not always seem to be aware of this statement, nor actually agree with it!

Communication

Charities should allow recognised experienced estate practitioners to get on with the administration promptly and efficiently. They can then concentrate their limited resources on those PRs less adept at estate administration. Charities who are ILM members and leading private client firms should work together under a standard protocol which sets forward how they will work together. Then firms and charities who do not subscribe to such a protocol get segregated and become the ‘ones to watch’. If solicitors feel that they are not getting the level of response, or conversely too much interference, from charities who are ILM members should take the matter up with the chief executive of ILM direct. Alternatively where legacy officers may appear to be unreasonable a personal approach by the solicitor PR direct to the chief executive or chair of trustees of a charity may prove helpful. The relationship between solicitor PRs and charity beneficiaries has to be one of interlocking confidence and trust.

An alternative approach

If the relationship between legacy officers and solicitor PRs fails then solicitors may simply advise their clients that the most sensible route is to leave the estate into a discretionary trust for the benefit of such charities or charitable objectives as the solicitor PRs shall in their absolute discretion think fit. This could be accompanied by a letter of wishes indicating which charities the PRs should consider.

This would be a retrograde step as far as charities are concerned as it has the potential for far greater abuse by the unscrupulous solicitor PR. Nonetheless, if legacy officers seek to exercise greater control than is reasonable or fail to respond promptly and efficiently to solicitor PRs requests for instructions then solicitors may encourage clients to proceed with a full charitable discretionary trust.

Summary of key points

• Ensure a validly executed clear unambiguous will, if necessary discussing unusual issues with charities concerned at the time the will is prepared.
• Tell the charities as soon as death occurs and invite a representative to the funeral.
• Keep the charities informed by regular e-mails from the date of death onwards.
• Tell the charities of timescales you want to work to and when you expect them to respond to requests for instructions.
• Invite a lead charity to co-ordinate and encourage prompt responses from other beneficiaries.
• Build up a rapport of trust and confidence with legacy officers generally.
• Lastly, treat the legacy officer as your friend not the ‘the irritating enemy’.

Richard Roberts is senior director of Gedye and Sons Solicitors Limited, has been a solicitor in private practice since 1982 and sits on The Law Society Wills and Equity Committee.

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