How long does it take to get a grant of probate, again?

Just for solicitors:  a grant ad coll is not a “fast track”…

Probate Service
Target Times for issuing a Grant of Representation:

7 working days from the date of receipt of your application

Example: application received 14/3/2016 would issue on 22/3/2016 provided there are no impediments.

If your application is stopped for any reason, the Grant will be issued 7 working days from the date of receipt of the correspondence clearing the stop

AD COLLIGENDA BONA GRANTS

Please note that an Ad Colligenda Bona application is not a fast track Grant but is a Grant limited for the preservation of the estate

An Order is required from the Registrar before an application can be made.

 

Advertisements

Open Letter to anyone who made a Will with HSBC and appointed them as Executors

Open Letter to anyone who made a Will with HSBC and appointed them as Executors.

 

It’s a good letter:  I’m not sure whether whoever reads it realises that it is carefully written and may have taken a good few hours to check and double check, particularly when it refers to the organisation(s) to whom the wills have been sold.  Just as “concerned” means “angry”  and “precise” means”nitpicking in the extreme” in legal terminology, the swathes of what is not said about Simplify and its associated companies speak volumes.

It might seem odd that your executors can sell on the rights to deal with your assets, as the bank have done here.  But this sort of thing has happened, by and large, for professional executors over the years, albeit perhaps not so obviously.  Law firms never die, they just get taken over…  successor firms can prove the wills of the prior firm if the will was drafted that way.  Or encourage the clients to make a codicil (and in doing so, both correct any massive errors in initial drafting and/or update terms).  It is no mistake that the wills stored by a firm are called a “will bank”.  Usually, however, with a whole firm takeover, the wills and live files, the contacts and reputation are all bound up together and described as “good will” valued for a greater or lesser amount than the desks, carpets and computers.  Slightly less clear that your will can be seen as a commodity in itself, for sale to another organisation for a price, whilst still being your own property as a client.

 

Who you choose to be your executors is a personal choice – you might prefer a professional executor because your family do not get on well with each other – or you think that it is too much of a burden for friends to bear.  That’s quite alright for you to make this choice – but as this letter rightly points out – the terms on which you appoint a professional do need to be made clear to you – they will charge for their work – and how they do this should be something you feel comfortable with – these are your assets, after all.

Some professionals are bound by professional codes in their conduct towards the public – solicitors are – you can make complaints to the SRA if you feel you have not been treated in a fair way.  Accountants have a professional body too – it is fair to say that complaints to a professional body can be incredibly damaging to the firm, and so a reasonable amount of time is spent in trying to do the right thing and not get complaints in the first place.

If you are to choose a professional, then it’s a good idea to see what institution regulates them – who is the person that they have to answer to when you are no longer alive to express your concerns – who can your beneficiaries turn to when they think they are being overcharged, or waiting for ages – is there anything or anyone to protect them?

 

Budget 2015 and initial thoughts.

Budget statement in pdf from Inland Revenue

Some of the things I think this means.

Terms:

Although this refers to a “main residence nil rate band” the personal representatives can elect for any property owned and lived in by the deceased to count as the residence for this purpose.  The term is not related to the main residence or Principal Private Residence.  Potentially, each spouse could have a separate private residence, therefore.

The residence nil rate band (which if someone else has not already labelled it thus, I shall call it the “RNRB”) can be transferred to a spouse and remain intact.  This applies no matter when the first death occurs, so long as the second death occurs after the start of the tax year 2017-18.

The RNRB might end up, therefore, also being called the TRNRB when claimed on the death of the second spouse. There will be new additional forms to complete in addition to the IHT402 and the IHT217.  There will need to be new evidential burdens to show that a recipient falls within the class of acceptable beneficiaries called “descendants”.

The NRB as we know and love it applies at the current rate until the tax year 2021-2 commences.  It applies to all transfers whether intervivos or on death.

The RNRB applies only where there is a residential property in which the deceased has resided (or the spouse of the deceased???) and where the “proceeds of sale of that property” or the property itself pass to a linear descendant of the deceased (or of the deceased’s former spouse??).  The bits in brackets are where I am less certain of the detail.  One thing is clear – the definition of what is considered “linear descendants” is different from the standard definition of “issue” or “bloodline” since it includes not only the usual adopted children and children of the bloodline but also step children and foster children.

Things I am not sure about:

I don’t understand quite how you can quantify the foster children – but perhaps it is possible to prove that an individual is a foster child or has been one at any date.  Similarly, step children.  But then again, this gives an allowance for those children, rather than penalising them or giving them an entitlement.

I am not sure about the “proceeds of sale” aspect of things.  The Inland Revenue states that identifying what has been the proceeds of sale of a family home and making sure that there is a credit for this will be something that will be the subject of a consultation paper shortly.  Presumably, there is some paperwork required for Inheritance Tax purposes on the sale of a family home – so where downsizing from any home worth less than £2,400,000 is potentially eligible for this – so as to preserve the relief on this home.  This will be something that all conveyancing solicitors will need to know about as well, since otherwise it would not be something that would be mentioned to the client.  Few clients associate the sale of their home with the need to consider how it fits in with estate planning.

Does this now mean that flexible life interest trusts now need to be altered so as to take account of this potential future relief?  A “FLIT” by which I mean a discretionary trust, subject to a prior life interest.  I think it does.  Because the whole flexibility of these relies on the discretionary trust *not* being an individual or descendant.  Time to review these I think, and adjust expectations and drafting accordingly.

I think the new legislation means that (at least initially) if you are worth £2.4 million or more, then this RNRB is useless to you.

I also think this means that if you are selling up so that you can free up capital to make potentially exempt transfers, then you have to weigh up carefully whether doing so means that you will lose out on the RNRB.  The RNRB *only* applies on death, and does not apply to PETS that become chargeable.  Worst case scenario is that you free up funds, give some away to your children and do not survive the seven years.  When I say “some”, I mean if you give away more than one Nil Rate Band’s worth of gifts.  So – PETs will have to be limited to below £325,000 for each individual donor if they are within 7 years of death, or statistically likely to be so.  Or in other words, there is no such limitation, but without advice on the pros and cons, the decision should not be taken without, for example, more seriously considering term life insurance, in the very least.

 

In conclusion:

Possibilities of legal involvement in people’s affairs seem to have increased.  And in a way that doesn’t seem right – why should the taxpayer be hemmed in at every turn?  Why not just increase the whole of the NRB to £500,000 each – and not have this extra complication?  What about those childless couples who want to leave their money to nieces and nephews?  Why is this budget not making it easier for the rich to pay tax, rather than harder for the middle income people to manage the burden of it?  This extra complexity just means more work for the civil servants, more bad luck for the childless, more work for lawyers, more fees for professional advice.   And the extra complexity is not actually needed – it doesn’t close any major loopholes or planning issues where “clever lawyers/accountants” have been finding “loopholes”.

legalchap: Will Aid and the solicitor/non solicitor.

legalchap: Will Aid.

Yes, it qualifies as a rant – but perhaps justifiably.  Other reports on the Law Society Gazette and the Private Client Section 

The whole Will Aid system is built on the idea that lawyers do something good for a month (as if we do not do good  for the rest of the year by providing a good service, albeit for a fee) by waiving their fees for charities.

Actually, it is more like there is a fundraising charity out there, which does all the marketing, then says they will donate the proceeds of the campaign to 8 or 9 charities.  I have not looked too closely about the amount that actually *goes* to the end charities *after expenses*.  Certainly as solicitors, we are expected to pass on the whole of the donation to the charities and not to retain any part of the donation.  We are at liberty to charge an additional fee if the will concerned is more than a “straightforward” will – but then again, few of the people who consult during that period require very basic wills – most being middle class and well provided for.  Almost as if the message about making a will never reaches those for whom it would really be beneficial, like those on benefits, for whom the usual prices for wills would be well outside what they would consider affordable.  And once they are in front of you, charging extra when they have been led to believe that it’s £95 (and no VAT) becomes moderately difficult – some take it as an affront.

The thing is, the most recent slap in the face appears to be that after last years will aid campaign – there were still people who had not made wills and who had missed the boat for that year.  Unwilling to pay the usual prices to solicitors rather than the discounted fee that they would have donated to charity, those enquiring were told that making a will did not require a solicitor, and could be done by an unqualified person.

That is of course true – but the fact that so many solicitors (and the Law Society) have been donating time and expertise pro bono, as well as the risk associated with the work (so covered under the lawyers’ insurance not the charity’s insurance) it seems a bit of a slap in the face.

Why would anyone slap the hand that feeds like that?  Could it be that there is some incentive that is paid to the charity for so many potential clients being referred?  Could it be that the regulatory requirements of the non solicitors are far lower, or that the attention devoted to the clients is of lower quality?  Could it also be that if the non-solicitors retain up to a quarter of the “donation” that this is not in fact, setting both sets of providers on a level playing field?

You give and you give, and then someone else walks off with the prize…  Perhaps it is somewhat naive of solicitors not to expect professional fund raisers to act in this way, if they can get money for the charities thereby.  If chuggers can pursue the elderly so they are desperate enough to commit suicide then this is fairly minor in the scales of the lengths to which fundraisers will go.

Will we do Will Aid this year?  Ho hum….

Fraud and abuse

STEP have just sent a set of newslinks round and this story about a crooked solicitor is one of the things that I get an almost visceral reaction to.  I can’t explain it – it just seems as wrong to take money that has been entrusted to you, as it does to abuse the trust of a child – something that is beyond acceptable, and quite revolting.

Its one of those high horse things, I suppose – and heaven knows I am  not perfect  – but to make a mistake is one thing – to set out to plunder the money that belongs to another in order to get yourself out of a hole is disgusting.  Who is the person that you should be able to trust with your money, to look after you – if you pay them a fee for their time?  a lawyer.

There are cynics out there who would undoubtably say that you should never trust anyone – and point out that we once had trust in bankers and look how long we’ve had to pay for that trust.[1]

I can understand that reaction – and especially in jurisdictions where there is a general breakdown of law and order, or where the political system may be less than transparent, and potentially corrupt, temporary or imposed by force.  Those situations are not civilised, the rules of trust there are limited to you and yours and self preservation in a time of trial, of war or otherwise.

But we are living in England.  We are not at war.  We live in a democracy.  Our currency is more or less stable.  This is our civilised time, where we should have standards and trust and faith in those who profess to take care of us.  Profess – abide by a code that is to honor the individual patient or customer or student, rather than to abuse.  That professional code is not uncommercial, but should be reconcileable with business interests, and where they conflict, should prevail.  All solicitors have that in their Professional Code of Conduct, in case you wondered.

I hope that this man does have some sort of criminal sentence.  As justice must be seen to be done.  And that by looking at his path, we can learn how to catch people sooner.  Because this is a regulated profession – there must be some safeguard for the public and accountability.   Let’s not even consider the unregulated business that deals with probate and attorney matters.  Would an unregulated provider of such services face headlines in the papers and such destruction of their career and livelilhood and personal humiliation?

 

[1]  I do not remember my bank or supermarket professing any ethical obligation to me, except in relation to the selling of investments under the FSA code.  I expect my bank and supermarket, to be businesses whose prime objective is to make money out of me:  how they treat me along the way is whether I choose to stay with them or not.   I feel no personal connection to my bank other than that of inertia or convenience – a bottle of Ribena is the same in Tesco as it is in Sainsbury as it is in Asda.  If my favourite item disappears from a shelf, I can choose to go without or find it elsewhere.  I cannot trust that the supply is tailored to my needs, or desires, or that my continued use of a particular bank or store brings greater rewards than shopping around.  But then they never promised that in the first place, did they?

Fixed fee or by the hour?

Some people think that solicitors charging for their time is a bit old fashioned. There is a huge move towards the commoditisation of legal services – so that, rather like Tesco, you buy something off the shelf. This is greatly to be praised – it means the customer can see what they get and be able to compare services.

The difficulty comes when you compare a retail item to a service and a skill. If you want a T-Shirt, do you get it from Tesco, Gap, or somewhere designer? What is it about the T-Shirt buying experience, or the product that you buy that appeals? The good quality? The cheap item that you need before heading to the beach? The one with the special label that means you are exclusive and/or you look more attractive?

When you think about other trades – plumbers, electricians, mechanics, gardeners – then they also charge for their skills on the basis of how long it will take. Some charge a combination – a call out fee with one hour included.

What’s the worst thing about fees being charged on the basis of the time that is spent? Not knowing where you are. And being faced with a huge bill. And how large a bill depends sometimes on what you are used to. And what you think the job is worth.

I’d like to run a survey – how should your solicitor charge?