Legacy administration

Although online will writing can be more cost-effective and convenient than using a solicitor, it is important to remember that the will writing market is not regulated.

Unlike solicitors who are bound by the strict rules of the Solicitors Regulation Authority (SRA), many willwriting services are not members of a recognised professional or trade body. Without the backing of official regulators, these will-writing services may not be able to provide adequate protection if the will is then later disputed.

When a solicitor meets an individual to prepare their will, they are doing more than simply taking their instructions. One of the most important aspects of the will writing process, is for the solicitor to ensure that the individual has testamentary capacity and is not under any undue influence.

The solicitor would usually see the client face-to-face and on their own to ensure that they understand the will and are not acting under pressure from anyone else.

Another key part of the will writing process is to ascertain whether there is anyone who may be able to bring a claim under the Inheritance (Provision for Family and Dependents) Act 1975. This could be something that the individual preparing the will has not considered, and it may not be immediately evident from the initial instructions.

In addition, an increasing number of people have complex estates or family structures. A solicitor may be able to suggest more appropriate ways of dealing with these issues in the will, which the individual may not have thought about.

Finally, there are very specific requirements for executing a will, and a solicitor can oversee that all of these formalities have been complied with. Therefore, writing a will online has the potential to increase the risk of a successful claim being brought against an estate after the death of the testator.

People may choose to benefit a charity in their will for a variety of reasons. They may have close connections to the charity in question, they may not have any family or friends that they wish to benefit, or they may be trying to reduce the inheritance tax liability for their estate.

The reason for wishing to benefit the charity may influence the kind of legacy they wish to leave.

The most common gift is a fixed legacy. However, it is possible for people to leave a share of their residuary estate to charity and this would be encouraged where a sizeable legacy is contemplated to enable the fluctuating value of the estate to be taken into account. This may also be an option for people wishing to leave 10% of their net estate to charity to reduce the inheritance tax rate for the overall estate.

As an alternative, a person may decide to leave their estate on the terms of a discretionary trust, of which a charity may be one of a number of beneficiaries, with the intention of the charity benefiting if and when the family members no longer require any financial assistance. In this situation, the person should be encouraged to leave a letter of wishes for the trustees, making these intentions known.

Finally, if the person is not able to make a decision on a particular charity, or wishes to benefit several charities over time, it may be more appropriate for them to set up a charitable trust. The trust will stipulate specific criteria and will enable various charities of a particular purpose who meet the objectives to benefit from the estate.

The test for testamentary capacity was set by the 1870 case of Banks -v- Goodfellow, which requires ensuring that the person writing the will:

• Understands the nature and effect of the will;
• Has an awareness of the extent of the property they are disposing of under the will; and
• Is aware of the people they would usually be expected to provide for, even if they choose not to.

If there are any concerns about capacity, particularly for people who are elderly or seriously ill, then it is good practice, but not a rule of law, to arrange for a medical practitioner to meet with the client to assess their capacity and witness the will (the Golden Rule).

As solicitors are experienced in dealing with capacity issues, their involvement suggests that the person making the will had capacity unless there is clear evidence to the contrary.

If you are faced with a claim and the matter progresses to court for remedy, there are various considerations that the court will review with regards to the needs of both the beneficiary and the claimant.

These include:

• Financial resources;
• Financial needs;
• Obligations of the deceased to the claimant;
• Responsibilities of the deceased to the claimant;
• Size of the overall estate;
• Physical and mental capabilities of the claimant; and
• Conduct of the claimant.

Some disappointed beneficiaries may consider that charities do not have the same financial needs and resources as individuals, and will often be more prepared to challenge a charity’s legacy than they may an individual’s legacy.

However, in considering financial needs and resources, the court will consider that charities have obligations imposed upon them by the Charity Commission to maintain legacies left to them and that charities rely on their legacy income to continue their work.

The court ultimately needs to determine in any Inheritance (Provision for Family and Dependants) Act 1975 claim, if reasonable financial provision was left for the claimant, regardless of whether a beneficiary is a charity or an individual.

When your charity is left a legacy, no matter what the scope or value, the focus understandably turns to when that asset will be released from the estate and can start being used.

If a claim is being made as the result of an inheritance dispute, it is always worth factoring in the likely timescale and delays that could arise. If an inheritance dispute is unlikely to be settled out of court, affected parties may face a long and expensive legal battle.

There are time limits on when an Inheritance Act claim can be brought, but once it is in the court system, it largely depends on factors such as how busy the courts are, how quickly they can list matters, whether directions are complied with, and whether there needs to be any extensions to court timetables for mediation to take place.

It can easily take between six months to a year for an issued claim to reach trial. You must also take into consideration that pre-court action correspondence will probably have begun several months before proceedings are issued. As a result, matters can sometimes be ongoing for 18 months or more.

It is good news for your charity if someone lets you know that they intend to leave you a legacy. However, data protection issues arise as soon as you take their details.

Once you have an individual’s personal data, you need to ensure that you comply with the law around handling it. This should be seen as part of your wider compliance plan, but you can start by thinking about three key points:

1. The legal grounds for using the data;
2. What you tell the individual; and
3. How long you keep the data for.

On the first point, you will need to establish a legal basis for holding the information. For example, the consent of the individual. If you are relying on consent, you must ensure that it is specific, freely given, informed and unambiguous. You should also be prepared for the individual to withdraw their consent at any time, and if they do, you will have to stop using their data immediately.

If the initial instruction is taken over the telephone, you should follow it up in writing to confirm the accuracy of the information and to obtain informed consent for its use by you. Any communication or forms that you send should be clear and easy to understand.

Writing to the individual will also provide the opportunity to tell them what you will use their data for, how long you will keep it and to let them know their rights in relation to that data. By doing this, you address the second point, as supplying this information (often done by providing a ‘privacy notice’) is an important element of your compliance.

The law does not, in most circumstances, determine how long personal data should be retained for. However, the general principle is that it should not be kept for longer than is necessary.

In the case of someone who has indicated that they want to leave a legacy, one of the most important grounds for keeping their data would be to establish a link between them and your charity to be used as evidence should the legacy ever be challenged. If a claim does arise, although the courts have indicated that the lack of such a link should not penalise a charity, being able to demonstrate it would not be detrimental to the case.

With this in mind, and presuming that the individual does not withdraw their consent, you should be justified in keeping their information for a relatively long time as you have no way of knowing when you will receive the legacy. That said, you should not forget that the data can only be used for the purpose for which it was collected, so be careful not to allow it to be used for other purposes unless you have a separate legal justification for it. One way to help ensure this would be to keep it separate from other data, such as fundraising information.