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Administrator Fees for Beneficiary

including wills and probate
chris
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Administrator Fees for Beneficiary

#213991

Postby chris » April 9th, 2019, 8:28 pm

I wonder if you could help with an issue with a relative's estate?

My cousin and I were appointed joint administrators of an aunt's estate. Because we live a distance apart and he is a retired solicitor, he thought it would be easier to administer the estate if he were sole administrator with me as a backup. I didn't really have an issue with that and although he may have been high handed in some of his dealings, that is not the issue.

In his final accounts, he has awarded himself just over £5000 for his 'fees' for administering the estate. Obviously there was no prior notice that he was going to charge a fee and although the estate was about £400k, I gave him most of the info about investments etc. as I had been sorting out the finances under a power of attorney for the previous 5 years.

I would like to ask whether a fee is usually charged by a beneficiary or whether there is anything that I can challenge this on and secondly, if the fee is allowable, whether you think that it is too high for the size of the estate.

Interestingly, he did not do the conveyance for the house which makes me think that there is a reason for this and that he probably would have needed a practicing certificate or something to be able to do this bit.

What do you think?

Thanks for your help.

Chris

Clitheroekid
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Re: Administrator Fees for Beneficiary

#214007

Postby Clitheroekid » April 9th, 2019, 10:28 pm

Reluctant as I am to criticise one of my former brethren I'm afraid this is a major league try-on, and is not acceptable.

The SRA provides guidance - http://www.sra.org.uk/solicitors/code-o ... ement.page

I would particularly draw your attention to the following:

If you are an executor or trustee, you will normally have been appointed in your professional capacity as a solicitor. If so, you will need to decide whether to continue in a professional or private capacity.

If you continue to act as a professional executor or trustee, you will still be practising as a solicitor. As such, you will need to:

apply to the SRA, unless you are exempt under rule 10.2 PFR

hold a practising certificate

comply with the SRA Indemnity Insurance Rules (unless your practice is exempt)

comply with the SRA Accounts Rules in relation to client money and continue to obtain accountant’s reports, unless exempt under rule 32.1A of those rules.


Quite clearly, this chap doesn't hold a practising certificate, so he can't charge under this provision.

If you decide to continue acting as an executor or trustee in a private capacity, (i.e. not as a solicitor) you should:

stop charging for work done

ensure that you no longer refer to yourself as a "solicitor" in connection with the estate or trust unless you qualify that description with words such as ‘non-practising’

notify all parties with whom you are dealing in connection with the estate or trust (not only co-trustees and beneficiaries, but accountants, banks, etc.) that you will no longer be undertaking the work as a solicitor

explain to any co-trustees and to the beneficiaries the principal effects of your ceasing to be a practising solicitor – particularly the position regarding professional indemnity, and charging as a professional trustee or executor

Bear in mind, however, that even if you are not doing the work as a solicitor, you must still comply with Principles 1 (uphold the rule of law), 2 (integrity) and 6 (maintaining public trust). The Solicitors' Disciplinary Tribunal has jurisdiction over solicitors without practising certificates (and even over former solicitors who have had their names removed from the roll, in relation to things done whilst on the roll).


A retired solicitor is quite within his rights to charge for services rendered, but only if he's being employed as an adviser and the client is quite clear that he's not acting as a solicitor.

What he can't do is charge on the basis that he's acting as a solicitor because he isn't. If he was he'd have to comply with the various provisions set out above.

I would like to ask whether a fee is usually charged by a beneficiary or whether there is anything that I can challenge this on and secondly, if the fee is allowable, whether you think that it is too high for the size of the estate.

A lay executor (which is what he is) is entitled to be reimbursed his reasonable expenses, but has no right to charge any fees unless the beneficiaries all agree that he can. In this case there was no such agreement, so he can't charge for his work.

Moreover, as the above notes make clear, even though he's retired he's still subject to the jurisdiction of the dreaded SRA, so that if a complaint were to be made about his conduct he could face disciplinary proceedings, including being struck off.

I'd therefore recommend that you point out the SRA guidance set out above and ask for his comments - and please let us know what he says, it should be good for a chuckle! ;)

chris
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Re: Administrator Fees for Beneficiary

#214017

Postby chris » April 9th, 2019, 11:31 pm

Thank you so much Clitheroekid, as usual, you have come up with the perfect answer to my question with backing documentation that I can use. I am just emailing him now and will update you on his response. I guess that is why he also sent a little form with an acknowledgement to sign to say that I have received the accounts and have examined and approved them!

Chris

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Re: Administrator Fees for Beneficiary

#218536

Postby chris » April 30th, 2019, 7:53 pm

Hi Clitheroekid

Well - I have had an interesting response:


XXX did not appoint executors in a professional capacity she merely described our occupations - me as solicitor and you as accountant.

An individual does not have to be a practising solicitor in order to act as a professional executor or trustee.

Administering an estate or trust is not a 'reserved activity'.

I have not referred to myself as solicitor in any way shape or form.

Although I am no longer a 'practising solicitor' I am still 'engaged in the profession' albeit in the unregulated sector.

As such clause 10 of xxx's will allows me to charge for my time spent in doing paperwork to wind up her estate.

and another paragraph about it being in her wishes and that 'she made it clear a long time ago that she didn't wish it to be done for nothing'.


Although he says that he has not referred to himself as a solicitor, the accounts are prepared by Yyy LL.B but I guess that just means that he has a law degree.

Unfortunately I don't have a copy of the will (and he wrote it) but I have sent off my £10 to get a copy.

I will probably write to the SRA but do I need to go through a procedure before I make a complaint?

Thanks

Chris

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Re: Administrator Fees for Beneficiary

#218600

Postby Clitheroekid » May 1st, 2019, 12:18 am

At this stage I'd recommend waiting for a copy of the Will (though you're entitled to a copy from your co-executor anyway) just to see exactly what the charging clause says.

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Re: Administrator Fees for Beneficiary

#229996

Postby Clitheroekid » June 16th, 2019, 7:18 pm

I just came across this thread while looking for something else, and I was wondering what happened?

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Re: Administrator Fees for Beneficiary

#232466

Postby chris » June 28th, 2019, 8:30 am

Hi CK

There was a clause in the will saying that 'any of the trustees who is engaged in a profession shall be entitled to be paid in priority to all other dispositions herein fees for work done by him or his firm whether or not of a professional nature on the same basis as if he were not one of my trustees but employed to act on behalf of my trustees'.

As he claims to now do work as a will writer, he claims he is a 'professional' and therefore can charge even though he is not acting as a solicitor.

I have got a solicitor involved as there is another matter relating to him that is more serious but although the solicitor has written to him saying that even if this were the case and he was going to charge, this should have been made clear at the outset and charges and fees agreed in advance, otherwise he cannot charge. He is avoiding this question and insisting that he can charge.

Because of the other matter, I am not inclined to let it go and have just instructed the solicitor to tell him that I am quite happy for the 2 matters to be decided by either the SRA or the courts. I have also given him the option of settling the larger issue and me agreeing to fees of £2k as a compromise. I'll see what the solicitor comes back with but it looks like being a longer and more complicated process.

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Re: Administrator Fees for Beneficiary

#232617

Postby Clitheroekid » June 28th, 2019, 7:34 pm

chris wrote:As he claims to now do work as a will writer, he claims he is a 'professional' and therefore can charge even though he is not acting as a solicitor.

Hmm, I don't think that's a sufficient justification.

As I would hope that your solicitor has explained, the situation is governed by section 28 of the Trustee Act 2000.

Section 28 (5) states:

(5) For the purposes of this Part, a trustee acts in a professional capacity if he acts in the course of a profession or business which consists of or includes the provision of services in connection with—
(a) the management or administration of trusts generally or a particular kind of trust, or
(b) any particular aspect of the management or administration of trusts generally or a particular kind of trust,and the services he provides to or on behalf of the trust fall within that description.


Writing Wills is not remotely the same as managing or administering trusts. So if he can't prove that he manages or administers trusts for any other clients it seems to me that he can't bring himself within that definition.

And sub-section (6) makes it clear:

(6) For the purposes of this Part, a person acts as a lay trustee if he—
(a) is not a trust corporation, and
(b) does not act in a professional capacity.


In other words, if he can't prove he's "acting in a professional capacity" as defined he is simply a lay trustee, and as such he has no power to charge the trust.

Has your solicitor pointed this out to him, and if so what was his response?

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Re: Administrator Fees for Beneficiary

#258501

Postby chris » October 17th, 2019, 3:03 pm

Hi all (and especially CK)

Just a brief update on an ongoing saga. After several solicitors' letters and less than satisfactory responses, the saga goes on. The administrator's fees are an issue but more importantly is the other issue surrounding a loan that was excluded from the final accounts.

I have today lodged a formal complaint with the SRA and although told by others that there is little that they will do as he is retired, it is certainly worth trying to get some action. I will let you know how things progress.

I think the issue is that he is aware that legal proceedings may not come cheap and is obfuscating to increase my bills presumably in the hope that I will give up!

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Re: Administrator Fees for Beneficiary

#258603

Postby Clitheroekid » October 17th, 2019, 10:23 pm

chris wrote:I have today lodged a formal complaint with the SRA and although told by others that there is little that they will do as he is retired, it is certainly worth trying to get some action.

That's not the case if he's still on the Roll of Solicitors, as the SRA continue to have jurisdiction over all solicitors until and unless they're either struck off or voluntarily take their name off the Roll.

As it costs nothing to remain on the Roll most solicitors don't bother to remove themselves after retirement.

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Re: Administrator Fees for Beneficiary

#259855

Postby jazzfestival » October 24th, 2019, 12:44 pm

As a side note - good luck with complaining to the SRA .

Our executor lied through her teeth claiming a death bed will excluded named beneficiaries in the written will and denied existence of overseas land which formed part of the estate . We spent many months jumping through hoops for the SRA eg sending recordings of phone calls as requested only to have them rejected as needing a voice expert to validate them .We sent evidence of incorrectly completed probate forms showing that the existence of a minor was denied .etc etc

But apparently the SRA feels that it is all completely acceptable for a solicitor ( albeit acting privately ) to act in this way .

Me ? Bitter ???

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Re: Administrator Fees for Beneficiary

#260275

Postby jazzfestival » October 26th, 2019, 9:37 am

Chris ,if involving the SRA be aware that anything you supply to support your concerns about a slcrs conduct will be expected to meet the same standards as evidence produced in a court of law .

Much of our stuff was rejected because we did not prove intent.A voice mail was not considered because we did not produce an expert witness with samples of the voice in question and verification .Pleas from us as whether there was another way to validate the voice mail were simply ignored and unanswered .

So I think you will need a skilled barrister to help if you wish the SRA to pay any attention .

chris
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Re: Administrator Fees for Beneficiary

#260993

Postby chris » October 30th, 2019, 9:22 am

Thank you for your replies and I have just heard from the SRA that they will not be investigating any further because apparently this is something that should be subject to legal process. Now I can perhaps see why they think that claiming that a loan to him is written off (even though he forgot to get a signed waiver), may need legal process to prove. However, even if this were the case, then since it was within 7 years of death, would mean that it needed to be reported on an IHT form - which it wasn't, and he admitted in writing that it was to save the estate IHT (by which of course he would mean himself since as the beneficiary of the gift, he was liable).

To the complaint of charging as a private individual - apparently that too is not significant enough to warrant further investigation.

They have decided that the hurdle to get an investigation into solicitor's conduct is that it not only needs to go to court, but that the judge himself must criticise the solicitor!

So at present we have got him to file proper return with IHT for the full amount of the outstanding loan but are waiting for final accounts which I would not be surprised to exclude the loan and keep the fees. We shall see!

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Re: Administrator Fees for Beneficiary

#261012

Postby jazzfestival » October 30th, 2019, 10:35 am

They have decided that the hurdle to get an investigation into solicitor's conduct is that it not only needs to go to court, but that the judge himself must criticise the solicitor!


I'm not sure I understand that .Is that what the SRA have said ? Is the suggestion that the bar is too high for the investigation to proceed ?

Presumably would apply to any consideration of a slcr's conduct .Or is just this particular investigation ,and if so ,why ?

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Re: Administrator Fees for Beneficiary

#261017

Postby chris » October 30th, 2019, 10:57 am

"If X is subject to criticism from the court this is something we would consider." From their response.

I have raised a formal complaint with them and asked them to explain their thought process but yes, he has to be criticised by the judge before they will even consider it.

I am reminded of Educating Rita and the only way they could get rid of him is if he 'buggered the bursar'!

Not a lot of joy there.

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Re: Administrator Fees for Beneficiary

#261029

Postby jazzfestival » October 30th, 2019, 11:25 am

That's interesting . And particularly interesting to me as I wondered if my experience with the SRA was unusual ,I did feel they were being deliberately unhelpful .

I'm considering going down the complaints process and will be interested to know how you get on .Obviously the complaint will be about their service but as you say one wonders what criteria they use when deciding on whether or not something is judged to be sufficiently serious to warrant action .

In our case,amongst other things, although the action was admitted by the executor 4 beneficiaries were execluded from the distribution of the estate .This was dismissed as a missunderstanding .


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