The Law Society’s Practice Advice Service provides an answer to frequently asked questions
I am acting in the administration of an estate which comprises mainly of a house which I anticipate may be difficult to sell. A pecuniary legacy has been left to a charity. What should I consider if there is a delay in paying the legacy?
It is considered good practice for a charity beneficiary to be notified of an interest in a will as early as possible, so many firms provide beneficiaries with a copy will at an early stage, usually on the understanding that it remains confidential until probate is granted. In any event, most charities subscribe to a commercial service which notifies the charity following a grant of probate when it is named in a will.
Where a pecuniary legacy is not received within the executor’s year, which ends on the first anniversary of death, beneficiaries are entitled to receive statutory interest payable at the basic rate of funds in court. Such interest will accrue from the first day after the anniversary of death. The rate can be found on the Ministry of Justice website at tinyurl.com/npztr5r.
Charity legacy professionals are aware of this entitlement, so it is advisable to keep them fully informed if there is likely to be a delay in paying out within the executor’s year.
For further information, see Charities as Beneficiaries (3rd edition), produced by the Law Society’s Private Client Section and the Institute of Legacy Management, and available from our online bookshop at lawsociety.org.uk/bookshop.
I am acting for an executor who has instructed me to sell the deceased’s company shares and to distribute the sale proceeds to the residuary beneficiaries. The latter wish to have the shares transferred to them instead. The executor wishes me to press on with the sale. Can they insist on this?
Subject to the executor’s duty to act fairly and impartially between the beneficiaries and not to favour one against the other, a beneficiary is able to insist on the appropriation of a corresponding part of any asset that is easily divisible (such as shares), rather than receive the sale proceeds. It will therefore be relevant to consult the beneficiaries to ascertain whether they wish to receive the sale proceeds or to have the shares appropriated to them. In some cases, there may be a capital gains tax advantage in appropriating the shares – such as to a charitable residuary beneficiary – to which the prudent executor should be alert.
For further information, see Law Society Publishing’s Probate Practitioner’s Handbook (6th edition), available to purchase from our online bookshop.
I have been contacted by a local firm of solicitors who are acting for the son of a former client who has recently moved in to a care home. The solicitors are demanding that I provide them with information about the circumstances in which my client gave instructions for his will, and the circumstances in which the will was executed. Do I need to provide them with a ‘Larke v Nugus’ statement?
No. A solicitor is only required to make a statement of his evidence regarding the execution of the will and the circumstances surrounding this where there is a disputed will after the testator’s death. Such a statement would be made pursuant to the case of Larke v Nugus (2000) WTLR 1033.
As your client is still alive, you are bound by your duty of confidentiality under the SRA Code of Conduct 2011. In this situation, you would need to obtain the consent of your former client to supply the information requested.
For more information, see the Law Society’s disputed wills practice note, available at lawsociety.org.uk/practicenotes.
Two years ago, I acted for a client in relation to the preparation of her will. I have just received a request for the disclosure of my will file from the liquidator of a company of which the client was a director. He has referred to certain powers that he has under the Insolvency Act, which he says mean I have to comply with his request. Is that correct?
Where insolvency proceedings are begun and an ‘office holder’ is appointed, he is empowered by the Insolvency Act 1986 (IA 1986) to obtain any ‘property’ which may be held by you as a solicitor in relation to the company, and to obtain from you certain information about the company’s affairs. This includes information in the possession of a solicitor which would otherwise have been protected by confidentiality or privilege. The term ‘office holder’ includes a liquidator.
However, in this case, your client instructed you as an individual in her personal capacity, and not on behalf of the company. You therefore owe her a duty of confidentiality which is not affected by the powers conferred on the liquidator by the IA 1986. Accordingly, you should not disclose the will file.
For more information, see the Law Society’s confidentiality around client insolvency practice note.
This column is compiled by the Law Society’s Practice Advice Service, telephone 020 7320 5675. Comments relating to the questions should be sent to Mrs. Anjali Mouelhi, Solicitor Technical Lead, The Law Society, 113 Chancery Lane, London, WCA 1PL.
While every effort has been made to ensure the accuracy of the information in this article, it does not constitute legal advice and cannot be relied upon as such. The Law Society does not accept any responsibility for liabilities arising as a result of reliance upon the information given.