My brother and I were the sole beneficiaries of my late Aunts Estate ( Gifts of Residue was a 50/50 split).
A third co-executor, my late Aunts retired IFA, decided to exercise ‘Power of Reserve’ . My Aunt left a ‘ List of Wishes’ which are not legally enforceable, and after open & honest discussions with our solicitor, the two remaining executors ( brother and I) decided on a ‘Deed of Variation’ to leave financial gifts to those who had really helped my aunt in her twilight years, together with lifetime friends, and excluded the children of neighbours whom she hadn’t seen for 20+ years and a few others. We also substantially increased the bequests to charities whom we thought had been left a miserly amount.
My Aunt also left a handwritten note, witnessed and signed by myself, excluding her ex now retired IFA from this ‘List of Wishes’ and we honoured that. The IFA was not aware of this, and having helped compile this ‘List of Wishes’ was expecting a substantial 4 figure windfall, and did indeed contact us recently asking when he would receive the bequest “ at this expensive time of yearâ€.
He is not happy and is taking legal advice on our conduct as executors. Bear in mind that we increased all the charitable donations and are consequently financially worse off.
I’m not taking any action until I hear the results of this ‘legal advice’. We can afford to pay the amount to him left in the previous ‘List of wishes’ Pre Deed of Variation, but think that the deceased’s hand written note should be honoured. Irrelevant perhaps, but the IFA probably did very well financially with annual % fees and commissions.
Apologies if slightly rambling, but any thoughts please?
|
|
Wait and see; are you able to speak to your own solicitor ?
|
I'm struggling slightly with relationship between will, the 'List of Wishes' and the later(?) handwritten note.
Were there pecuniary legacies in the will to the IFA and those children of neighbours who she'd not seen for years?
|
|
And me Bromp. Such lists are not legally binding. From memory I think the situation was that they should not be witnessed lest they be interpreted as codicils.
|
Yes, I am able to speak to my solicitor, should the need arise.
The sole beneficiaries in ‘The Last Will & Testament were my brother and myself. The List of Wishes is open to interpretation and not legally binding,, as told to me by the solicitor, hence the Deed of Variation.
This D of V listed the personal beneficiaries and several charities, and excluded several people from the original List of Wishes.
The financial amounts ( legacies) involved were substantially more in the D of V just in case anyone thought I was money grabbing!!
|
This sounds pretty complicated to me.
The IFA reserves his power as an executor (meaning, decides to stand down from his role). Whether this is a permanent or temporary withdrawal would need to be clarified legally. Technically, "reserving power" is not final. Withdrawing completely from the role is called "renouncing".
If permanent ("renouncing"), he has little to complain about. If not, I would think he should have been kept in the picture, so that he had the opportunity to resume his role.
Whether he would have had the ability to affect the decisions made by yourself and your brother, being one against two, and what would have happened in such a situation, I don't know.
It seems to me you may well need your own legal advice, but certainly wait until you see what emerges.
|
FP. That is the situation exactly.
With hindsight then maybe we should have kept him informed of our decision to increase the charitable donations, and amendments to the personal bequests.
He did absolutely nothing to help with the estate.... offering to help clear the deceased’s flat months after it had been done, and I am now torn between honouring the hand written note and giving him his several thousand ££ that were mentioned in the original ‘ List of Wishes’.
I have no wish to incur substantial legal fees.
It’s too late to prevent any ill will between the parties.....
|
I think a Deed of Variation can be valid only if all the original beneficiaries agree to the changes.
So if the adviser was a beneficiary then either he agreed in writing to the changes, or it is not a legal DOV.
|
|
I think you need to talk to him.
|
Given the tone of his request “where is my bequest, it’s an expensive time of yearâ€.... he received a letter with copies of the Will, Grant of Probate, Deed of Variation and copy of the handwritten letter excluding him ( and his family) from any benefit.
It was a very civil and courteous letter explaining why he hadn’t received anything.
His reply was anything but. Given the legal threat, which may come to nothing, I don’t want a face to face which could deteriorate rapidly, although I would be more than happy to discuss the issue in the presence of the solicitor, and if I have been remiss in interpreting the situation, then make full amends with immediate effect.
|
I agree Cliff. The only beneficiaries in the Will were myself and my brother.
All other parties mentioned were in the List of Wishes, which is only for guidance. The IFA was not mentioned in the Will as a beneficiary otherwise he would have received his bequest... despite the letter excluding him from any legacy.
But he wasn’t. So he didn’t.
Sorry that sounds harsh...it’s didnt mean to be!
|
>> I think a Deed of Variation can be valid only if all the original beneficiaries
>> agree to the changes.
>> So if the adviser was a beneficiary then either he agreed in writing to the
>> changes, or it is not a legal DOV.
In light of LL's latest post I don't think the FA was a beneficiary. For some reason*, rather than making pecuniary legacies, the deceased had one or more 'letters of wishes' requesting the executors to make gifts out of residue.
The executors have chosen to disregard some/all of the wishes. Instead they've taken alternative route of amending the will via Deed of Variation to insert pecuniary legacies. They were advised by a solicitor and will need his further assistance in how to respond to FA's claim.
*Possibly so that if estate was largely consumed in care fees the legacies didn't take all or most of residue.
Last edited by: Bromptonaut on Sat 9 Dec 17 at 14:11
|
Bromp, you’ve nailed it. Exactly so.
As a co-executor I would have felt very guilty leaving the people who improved the life quality of my aged Aunt in her final years with nothing. The solicitor agreed hence the Deed of Variation.
And we thought that was the end of it. It would have been so much easier, and unfair, to have taken the easy less costly route.
And it’s now snowing in Ribblesdale so time to leave for the Travelodge at LBA, calling in at Mothers to resume searching for her lost false teeth.Again.
Last edited by: legacylad on Sat 9 Dec 17 at 14:49
|
I would just sit back and ignore the FA.
Let him seek, and pay for, legal advice. With the outline you have given the FA is
due SFA (sweet f**k all). Any legal advice he pays for will probably confirm his entitlement is zero.
If he were to get a different piece of advice all you will get is a letter from the lawyer. Give it to your lawyer and he will snuff out any chance of the FA getting anything. Point out that he will be liable for any legal costs you incur in his quest of the fruitless chasing of monies from your aunt's estate.
A friend had a relative who died without a will. Small estate & 3 of the grandchildren felt they were entitled to more than 1/6th each (they wanted 1/5th), (their late mother's share of the estate) the other 2 grandchildren were given 1/4 by their mother who is/was still alive. They went to lawyers but eventually cashed their cheques just before the 6 month deadline on the cheques. He has heard literally nothing more in nearly 6 years.
|
|
Does an estate pay for claims against the estate or am I remembering some twaddle from Dickens?
|
You are thinking of Jarndyce v Jarndyce in Bleak House, The case drags on in the Court of Chancery for generations and the costs devour the proceeds of the will.
Based on an actual case I believe.
|
|
Presumably in LL's case, the Financial Advisor made money out of the deceased by being paid to give advice on investments and even managing the investments. He should respect her wishes in my opinion... he's probably spent the money he thought he was getting though and wants to kick up a fuss to get it.
|
>> Does an estate pay for claims against the estate or am I remembering some twaddle
>> from Dickens?
IIRC it is/was a convention but court can make a claimant liable for his and the estate's costs if it sees fit.
I've certainly seen something recently in the Court of Protection, where a similar presumption existed, that costs of an egregious challenge to actions of a Deputy were to be borne by the challenger.
Last edited by: Bromptonaut on Sat 9 Dec 17 at 18:39
|
The non-binding list of wishes, presumably dated after the will, is one thing. But if there is another non-testamentary document dated afterwards then surely the FA must be without a leg to stand on?
The concern if thete is any must surely come from his being named as an executor and being out of the loop...but as he wasn't a named beneficiary anyway, that must be a bit thin?
Dangerous to assume, as points of law do not always reflect equity or common sense, on the basis of which he certainly shouldn't benefit.
I know I am adding no value here but if it were me I would not be rolling over.
|
It seems to me that if the IFA is not a beneficiary in the will then he has no leg to stand on. Particularly if he has been paid in full for the advice given to and actions taken on behalf of your aunt.
However he might argue that he was not paid for work done, or was only paid in part, on the understanding that he would recieve a gift from her estate and that is why he was mentioned within the list of wishes. If so he could assert that the note removing him from the list of wishes was unreasonable as he was owed a debt. Whether this would stand any stead legally though who knows.
I certainly wouldn't be paying up immediately though I wouldn't want to incur substantial legal fees. I would wait and see and may consider making him a goodwill offer on the basis of the good work done for your aunt etc.
|
I've just re-read the OP about the IFA exercising a power of reserve. I bet he's kicking himself for bowing out and leaving the other two executors a free hand.
On the other hand,
"Power reserved. In the context of probate, power reserved means the postponement of an executor's right to the grant of probate in a deceased's estate. It applies where one executor does not wish to assert his or her right to the grant at present but does not wish to relinquish it totally either."
So could he claim that he had not relinquished his role totally, and that the significant changes that the other two executors made required his involvement, hence were unlawful?
|
I’m 99.999% certain the IFA was very well remunerated for the advice he gave my late Aunt. One off fees for moving investment providers, and an ongoing annual commission taking a % of the value of the investments, which were not unsubstantial. The more they increased in value, of which there were several, the more his commission.
The changes made, viz List of Wishes to Deed of Variation, was a recommended action by our solicitor who specialised in Wills and future IHT planning. The IFA went to the Solicitors office to sign the ‘Power Reserved’ document as he did not wish to participate in the day to day affairs of resolving the estate. I’d not heard of this and it was a suggestion made by the solicitor.
The word ‘avaricious’ springs to mind.
There were other unethical issues post death involving this IFA which I am not going to muddy the waters with at this juncture.
As always, your comments have been much appreciated
Last edited by: legacylad on Sun 10 Dec 17 at 19:13
|
The IFA went to
>> the Solicitors office to sign the ‘Power Reserved’ document as he did not wish to
>> participate in the day to day affairs of resolving the estate. I’d not heard of
>> this and it was a suggestion made by the solicitor.
Did you find out why? Lack of time/interest?
|
|
He was in my opinion unprofessional as an IFA to manage to get himself in the will as a form of beneficiary (I know not an actual beneficiary).
|
>> He was in my opinion unprofessional as an IFA to manage to get himself in
>> the will as a form of beneficiary (I know not an actual beneficiary).
I agree. Would have been horrified if my Mother's IFA, who was amply and properly rewarded for her services, had turned up in a letter of wishes.
In LL's aunt's case the words that spring to mind are Undue Influence.
|
|
In my completely unqualified opinion for a IFA to end up, and be aware he/she has ended up, in as a beneficiary of a clients will when their only interaction has been as an IFA is unprofessional, and I’d consider exploring this with the appropriate regulatory authorities if need be
|
I disagree.
Firstly, he wasn't in the will. Secondly perhaps he went the extra mile. Perhaps he did very well for her. Perhaps he protected her from some unwise decisions.
In this particular case he doesn't sound all that great, but I think it's a step too far to say that under no circumstance could someone wish to reward their IFA within their legacy.
|
I agree with No FM2R. Just because somebody acted for you in a professional capacity should not exclude them from some kind of benefit from your estate when you croak.
Could be wrong of course. I often am.
|
|
Major.conflict of interest IMO. The IFA was involved in drawing up the LOW? Wrong, wrong, wrong. The I is for indepedent and he was not. Report him.
|
PeterS.... as a point of clarification, he ended up as a ‘beneficiary’ in the List of Wishes. Not the Will. I apologise sincerely if that appears pedantic. If he was listed in ‘the Will’ , or anyone else for that matter, that person or parties would have benefited as per the deceased’s instruction.
He had retired as a sole trader, selling the goodwill and contacts to a firm of IFAs, who took over my own ‘retirement portfolio’ when he no longer acted for me. His actions when advising me were fine, although I’m no expert, and much prefer the new advisors.
To the best of my knowledge he gave up the role because he had other things to do...a part time job in another field, family, more playtime. At the deceased’s Funeral he told my brother and I he did not want to be a co- executor, then had a change of heart a few weeks later.
I wonder why.
|
Ah okay, my mistake - sloppy wording in my response. I still think there are more appropriate ways of remunerating an advisor for good work than via inclusion in a list of wishes, and wonder if it wasn’t the result of undue pressure. Advisor persistently angles for additional reward, client kicks into long grass by saying don’t worry, it’ll be covered in my will...
If he’s sold out to a larger firm, is he even still registered as an IFA? Either way, AFAIK they are required annually to confirm they have carried out the appropriate level of CPD, and have met the the ethical standards of their professional body...
|
I don't think there is anything wrong per se with rewarding an IFA. It's just that in this case there are doubts about whether the mechanism chosen (Letter of Wishes) is actually valid.
After all, it's not unethical for executors or trustees to be rewarded - indeed if you employed a solicitor as an executor he would expect to be without question.
|
Discussed this tonight with my retired IFA mate. Certainly if the IFA was still employed their code of conduct prevents them benefiting from clients and you could have referred him the the FCA for confirmation of that.
In theory this still applies once he has retired.
He had one client where he thought he might get a bung but it didn't happen. The client had followed him through a number of companies and he had actually given some extraordinarily lucky advice which had given the punter a windfall of over £20k. My buddy said that as there is hardly any sanction they could impose he would most likely have pocketed the money and kept quiet,a and hoped no-one spilled the beans
But he said he would not have dared take the approach yours has, at any time. So at least some IFAs have a moral compass... :-)
|
My moral/legal comment on a IFA benefitting not withstanding, he was in some 'wish list' and the deceased decided he did not deserve this so changed her mind.
So I wonder how many old women he was the IFA for and got into the will in some way.... Just wondering. ;-)
Last edited by: rtj70 on Sun 10 Dec 17 at 23:34
|
>>So I wonder how many old women he was the IFA for and got into the will in some way....
Exactly the question I would be posing to the FCA - a bit of dirt-digging might show that he retired due to a series of nice earners.
|
I worked with a colleague for some 6 years. In that time he, & his wife, inherited 2 bungalows & small house - all in the Stratford upon Avon area - elderly maiden aunts x 2 & a widow of a GP who outlasted her husband by decades.
He remarked one day that he was taking a few days off to clear his aunt's home - I said "why did you wait 12 months to clear it?"- 12 mths ago was my wife's aunt, this is my dad's eldest sister. They had been left almost 100% of 2 valuable estates in 12 months.
Connection to the thread is that "almost 100%" - there were bequests to a few charities & £2,000 / £3,000 IIRC to the GP who had been so good to her for many years.
How many other GPs have a few £££s every so often for "doing the job they are well paid for"
A £1million+ easily in 12 months as each of the bungalows was in the region of £500K despite needing renovation - He did nothing to the houses other than clearing furniture, lifting carpets & sweeping up (& making sure there were no valuables left behind - I bet)
|
>> How many other GPs have a few £££s every so often for "doing the job
>> they are well paid for"
I suspect quite a few. Always happened I think. While I was doing CoP casework I saw lots of wills and some would have bequests of this sort. There's been subsequent inflation though as figures then were in low hundreds. If it were a lot and a recent will I'd probably have got at least informal advice from the legal officers.
It was messing with wills that finally got Harold Shipman properly investigated.
|
>>They were advised by a solicitor and will need his further assistance in how to respond to FA's claim.
Nah. Don't be frightened into spending a load of money with a solicitor (which will inevitably happen, probably more than he was expecting from the will). Wait until the police turn up or you are taken to court before incurring financial expense. Neither will happen.
LL>>He did absolutely nothing to help with the estate.... offering to help clear the deceased’s flat months after it had been done, and I am now torn between honouring the hand written note and giving him his several thousand ££ that were mentioned in the original ‘ List of Wishes’.
If professionals are listed as executors in the will they are not entitled to charge for their professional services unless the will specifically allows it. I am therefore not surprised – as presumably no fees were mentioned – that he reserved his position. I am *totally* bemused at the reference to his coming to help clear out the house. That would not be in the remit of any professional adviser, they would appoint house-clearance firms to do this. The whole thing sounds extremely peculiar to me.
|
My brother and I didn’t involve a house clearance firm....I like to think that I am an environmentally friendly person. Very little went to the tip. A lot of time was spent listing stuff on several Freecycle sites for people with not much money. We even delivered the kitchen units FOC. The entire 35yo kitchen and appliances went this way, as did lots of furniture and a garage full of stuff. Various charity shops got car loads.
Only after we had stripped the flat and begun serious renovation work did he offer to help, by which time it was much too late.
I’m happy to wait and see what develops before speaking to the solicitor who handled, and advised, on probate.
|
>> I’m happy to wait and see what develops before speaking to the solicitor who handled,
>> and advised, on probate.
I'd suggest letting the solicitor know while telling him your inclined to do nothing. That way he can give advice as what might be needed next and you're ahead of the game.
|
|
And possibly incurring unnecessary costs needlessly...Solicitor isn’t cheap, but I appreciate your advice. Thank you
|
Bromp
Our solicitor is now in the loop
Taken your advice. Thanks.
|
Legal Will question - R.P.
