Choice, Cost & Control-Getting Executors and Trustees Right : Edward Rees and Ben Asterley.

If you haven’t heard previous shows there’s plenty of content for you if you’re going through a divorce, want to know more about claiming for injuries or you’re training to be a lawyer. You can listen to these shows on your favourite podcast app and get more information by visiting lblaw.co.uk forward slash knowledge. In this podcast Head of Private Client Edward Rees chats to Ben Asterley, a trainee solicitor who’s recently joined Lanyon Bowdler. about professional executives and trustees. Edward explains the complexities around these roles and they discuss whether family members should be appointed or whether professionals are a better option. Ben explains the differences between executives and trustees and they both go on to explain what the roles involve and when favouring a professional could be advantageous.


[00:00:59 – 00:01:25] Edward: Hello, I’m Edward and I’m a solicitor in Lanyon Bowdler’s private client department and today we’re going to be looking at a question that comes up in most meetings where we’re talking about will writing and estate planning, which is the question of should you appoint professional executors and trustees or should you keep those roles within the family? Should you just appoint your nearest and dearest?


[00:01:24 – 00:01:38] Edward: to carry out those roles. Now, I’m joined today by my worthy colleague, Ben Asterley. And Ben is a newly arrived trainee solicitor in our private client department. So welcome, Ben.


[00:01:37 – 00:01:38] Ben: Thank you.


[00:01:37 – 00:01:41] Edward: And have you ever done anything like this before?


[00:01:40 – 00:01:42] Ben: Nothing quite like this.


[00:01:41 – 00:01:43] Edward: Nothing quite


[00:01:42 – 00:01:43] Ben: I


[00:01:42 – 00:01:43] Edward: like this.


[00:01:42 – 00:01:46] Ben: might have done a small podcast when I was in school.


[00:01:45 – 00:01:46] Edward: Really?


[00:01:45 – 00:01:53] Ben: Yeah, it was filmed with a phone on a drum in a music studio. yeah didn’t have the lights and cameras like this though


[00:01:53 – 00:01:57] Edward: so was that about that was a musical podcast then


[00:01:56 – 00:02:11] Ben: no it was just um a few of us had a pod chatting about random things at school um and the two hosts would invite random people from the school to to speak after school um about things going on things outside of school stuff like that I


[00:02:10 – 00:02:13] Edward: excellent why was this not on your CV I don’t remember anything


[00:02:12 – 00:02:13] Ben: don’t


[00:02:12 – 00:02:16] Edward: about this on your cv why were you hiding this It’s


[00:02:15 – 00:02:16] Ben: It


[00:02:15 – 00:02:16] Edward: from a…


[00:02:15 – 00:02:17] Ben: wasn’t the best.


[00:02:16 – 00:02:21] Edward: I’m trying… Is it still out there? Can we…


[00:02:20 – 00:02:22] Ben: Yeah, it’s still out there.


[00:02:21 – 00:02:22] Edward: Brilliant.


[00:02:22 – 00:02:28] Ben: Not too sure I want many people listening to it, but yeah, it’s on Spotify somewhere.


[00:02:27 – 00:02:31] Edward: Okay, right. Well, does it have a title?


[00:02:30 – 00:02:32] Ben: The episode is


[00:02:31 – 00:02:32] Edward: The series.


[00:02:31 – 00:02:35] Ben: called The Breadstick and Manuel Podcast.


[00:02:34 – 00:02:36] Edward: The what? The breadstick?


[00:02:35 – 00:02:46] Ben: Breadstick and Manuel. Two nicknames of the hosts. My nickname. was Trout’s, that’s Peter Trout’s, but that’s more their episode title, so it’ll be on there still.


[00:02:46 – 00:04:33] Edward: Okay. Well, that is absolutely fabulous. Well, Ben gainfully volunteered to come in today to have a discussion about this topic. It looks like a deceptively simple question. Should I be appointing my solicitor or a professional as a trusty on an executive? But the answer actually is rarely straightforward. what you’ve got executives and trustees they have significant legal responsibilities so that can range from administering the estate if it’s an executor somebody’s died dealing with the revenue managing trusts if you’re a trustee that could run for many years but I suppose the point we’re getting to is that many people will appoint family members without really considering whether that’s the right thing to do whether the that the family members have the time, skills, or even want to carry out that role. Conversely, people may almost by default appoint professionals and all think that you have to appoint a professional without really thinking that through so so what we’re going to do today is we’re going to try and explore when it is that professional executives and trustees can add value when they might not be necessary and how clients can make informed decisions that we would hope would help in protecting their estates and their loved ones having got all that out of the way all that introduction let’s start by looking at you know, what executives and trustees actually do and why those roles matter. So I suppose the first thing to say is we talked about executives and trustees appointing professional executives and trustees. I suppose a lot of people wouldn’t even know, well, what’s the difference between an executor and a trustee? You know, what, is there a difference? What do they do? So have you got any thoughts on that, Ben?


[00:04:32 – 00:05:06] Ben: I would say that a lot of the time there is a crossover between between the people who perform in those roles but certainly under a will you’ll have the executors who are the people named to administer the estate according to the instructions under the will whereas the trustees they may or may not be the same people who will manage a trust whether it’s set up in the will or it’s a lifetime trust entirely separate. But I now manage the day-to-day running of that side of things.


[00:05:05 – 00:05:06] Introducer: Hmm.


[00:05:05 – 00:07:31] Edward: That’s a pretty good summary and it’s a good point about the distinction, but also there is a crossover and they can be the same people, but they don’t necessarily have to be. And I suppose other important things to say are, you know, if you’ve got an executor, their role is to actually wind up the estate. So they’ve got to do all the necessary actions to obtain a grant of probate that then then unlocks the estate, if you like, and then you could administer the assets in the estate as part and parcel of that and part of their tasks they’ll be having to do. Well, they probably may not have to, but they may have to do tax returns, inheritance tax accounts, pay inheritance tax, pay off liabilities, collect in assets, distribute the estate. The trustee role, that’s not the trustee role because they’re not actually winding up. up the estate, the trustee role would then go on to actually be the people who are responsible for, you know, stewarding the trust, making those, like you said, those decisions that could be on a day-to-day basis about the management of the trust. They may have, they don’t always have discretion about how they apply the capital or the income of the trust fund. It depends on the kind of trust that you’re dealing with. And they also have obligations, in fact duties, statutory duties imposed on them in relation to the management and the stewardship of the fund. So, for example. taking let’s say a cash fund and making sure that that’s properly stewarded so if you’ve got a cash fund and you need to hold that as a trustee for a number of years you need to consider how you’re going to deal with that how you’re going to invest it it probably will not be appropriate if you’re going to be holding that for more than two or three years just to simply take that and put it in a bank account and get interest paid on it or put it in a debt cash bond it probably if it’s going to be held on a longer-term basis is going to need a proper investment portfolio that’s going to involve some kind of equity exposure and therefore risk and therefore you get into the realms of risk management and therefore you need to find investment advisors and you need to go through a whole due diligence process with with you know on that front and if you don’t do all that stuff then you could be falling being short of the duties that are imposed on you under the Trusty Act. So lots of obligations and that could go on for years and


[00:07:30 – 00:07:32] Ben: Yep.


[00:07:31 – 00:07:57] Edward: it could go on for a very long time. So quite important. So the distinction, different skill sets, well, crossovers, like you said, if you can do one, you might not be able to do the other, but you may be more able to or have the skills to do both kind of things. things um time commitment you may have the time to be executor because that could be say three months to a year and then it’s done but


[00:07:56 – 00:07:58] Ben: Yeah.


[00:07:57 – 00:08:32] Edward: you might not fancy or you might not have the time to carry out a role that’s going to go on for years even if it’s only going to take you a couple of hours per week and then there’s that longer-term risk aspect we talked about there with with with the trust fund so i suppose that’s the first thing is kind of understanding what we’re talking about what we’re talking about. What we’re going to look at now is those occasions when we think it is that a professional executor or a professional trustee for that matter can add real value. So Ben, you may have looked at this, you know, have you got any thoughts on those situations where it might be you can get some value out of having professionals involved?


[00:08:31 – 00:08:58] Ben: Yeah, definitely. In the few weeks I’ve spent at the firm already, I’ve seen that there’s definitely instances. such as complex estates where you might have assets outside of England and Wales or large taxation responsibilities such as filling out the IHT 400 and other documentation like that where having a professional manage that for you definitely has some form of value.


[00:08:57 – 00:08:58] Edward: Yeah.


[00:08:57 – 00:09:33] Ben: Something that a lot of people aren’t too aware of is the responsibility of managing a state account. So this can be quite complex if you’ve got a lot of transactions coming in, going out on state liabilities. And additionally, I think accountability is something that you definitely get with professional trustees. They’re held to account by their regulatory bodies. So for us, it would be the SRA. And a lot of the time their firms will have indemnity insurance and formal complaints procedures to follow if you’re not. But if you’re not satisfied with how they’re carrying out their role,


[00:09:32 – 00:09:34] Edward: Mm hmm.


[00:09:33 – 00:09:40] Ben: which is something you maybe don’t have if you’re relying on a lay trustee like a family member or a friend, for example.


[00:09:39 – 00:09:56] Edward: That’s actually a really, really good point. Let’s just park it on that one for the moment. Fundamental. If you’re involving solicitors, they have to carry insurance. I mean, maybe people I mean, I know. Did you know that before you got involved in being a training? Or before you?


[00:09:55 – 00:09:56] Ben: Then,


[00:09:55 – 00:09:57] Edward: Yeah,


[00:09:56 – 00:09:57] Ben: yeah,


[00:09:56 – 00:11:01] Edward: that lawyer solicitor firms have to carry insurance. Yeah. Okay. So maybe that’s something that’s kind of widely known. But in practice, that could be a real boon, I suppose, to know that there is a safety net. If the alternative is you get a friend or a couple of friends to be your trustees and they are responsible for managing huge amounts of funds and it might be, you know, we’re not necessarily saying the risk is that they’ll take the funds and they’ll. and they’ll just they’ll steal them um but it might be that they misunderstand how they’re meant to how they’re meant to deal with those they might misunderstand the duties that are on them in terms of investment they might misunderstand jumping back to what we were talking about before it might be a 500 000 pound trust fund uh you know it’s going to have a time frame of say 10 years and they might think well we really have to keep this all in cash form when we’re going to put it in a building society account and they’re getting a rate of interest on it but it’s really not great and over a 10-year time horizon The cost of living is really eroding


[00:11:00 – 00:11:01] Ben: Yeah.


[00:11:00 – 00:11:31] Edward: that, the rate of interest not keeping pace with the inflationary effect. And at the end of the time period where they have to account to the beneficiary for the funds, the beneficiary is unhappy and the liability then is on the trustees, as it should be, because they have a duty of care upon them to manage those funds properly. Innocently, they may have misunderstood what that involved. but if the beneficiary needs to sue them if you know let’s talk brass tax


[00:11:30 – 00:11:32] Ben: Yep.


[00:11:31 – 00:12:00] Edward: if a beneficiary needs to sue them in those circumstances for negligently performing their duties and the consequent loss to the beneficiary actually is the beneficiary even their success even if they’re successful in that are they going to be able to recoup anything are these people any good for the loss that has been caused that’s the i suppose i would describe it as innocent action or an act an act of omission rather than an act of commission or


[00:11:59 – 00:12:00] Ben: Yeah.


[00:11:59 – 00:12:19] Edward: a sin of omission rather than commission they range up to all sorts of terrible things that might that people might do if you’ve got a lawyer Yeah. And if they’ve been negligent, if it’s a firm of solicitors, if they’ve been negligent, then they’re going to have to make good the loss. And you know that they’re going to be good for making the loss because they have to carry the insurance


[00:12:18 – 00:12:19] Ben: Mm


[00:12:18 – 00:12:19] Edward: to


[00:12:18 – 00:12:20] Ben: -hmm.


[00:12:19 – 00:12:54] Edward: do that. So that’s a really important point that you’ve made there. The other points that you made are also key that there’s a lot of actual administration work involved in administering an estate, doing estate accounts, you’re required to do estate accounts. I mean, You know, you don’t have to file the estate accounts with any statutory body, but beneficiaries or residual beneficiaries are entitled to estate accounts on an estate. Some people love doing accounts. Some people love burying themselves in financial transactions and balance sheets and ledgers. But actually, in my experience, most people don’t. There’s a particular kind of person


[00:12:53 – 00:12:54] Ben: Yeah.


[00:12:53 – 00:13:01] Edward: that likes doing that. So that wouldn’t be for everybody. And the IHT 400. hundred that you mentioned have you seen an iht 400 yet


[00:13:00 – 00:13:07] Ben: I have very briefly. I’ve not filled one out. I actually don’t want to do when I’ve got stairs.


[00:13:06 – 00:13:35] Edward: brilliant okay all right so so you see one you know it’s a really it can be a really really long form complicated in terms of finding your way around it so this is the the inheritance tax account you have to file when somebody dies certainly if you know they’re going to have to pay inheritance tax on their estate and it’s a it’s a devil to complete and I would not I was having a conversation with somebody about this the other day if I was a lay person and it was my nearest and dearest who died I don’t think I’d be wanting to complete that myself I


[00:13:34 – 00:13:36] Ben: no and


[00:13:35 – 00:13:42] Edward: have done that I did it for my dad and I don’t think I would want to do that again I would want somebody else to do it


[00:13:41 – 00:13:57] Ben: it and it’s not just the filling out of the form itself that can be complicated it’s knowing that you need to fill out in the first place There are certain occasions where you do, there’s some times where you might think that you may be eligible for exemption,


[00:13:56 – 00:13:57] Edward: Yeah.


[00:13:56 – 00:14:07] Ben: where and the nature of the assets, the way that they’re being held in the estate actually means it does trigger the need for an IH2400. So it’s being aware of that too.


[00:14:06 – 00:15:00] Edward: Absolutely. So all of those things are examples of where having a professional trust or executive can provide value. That’s absolutely true. Why would you say about that is all of the things that we’ve talked about so far, whilst if you have Lanyard Bowler, let’s say, as your executives or trustees, they can do with all those things because they know what they’re doing. You do have another option, which is you don’t have to appoint Lanyard Bowler as your professional executives or trustees. You could still be the executor and trustee yourself or your nearest and dearest. There is could be and they then have a choice about who they want to instruct to carry out all the things that we’ve just talked about and of course then they have a free choice and they can use us if they want they can shop around and maybe choose somebody else if either they don’t like the price that we’re offering or they think they’re going to get on better with another practitioner from another firm.


Part 2 [00:15:00]

Speaker mapping:

Part 2 – Speaker 0 = diarization label A

Part 2 – Speaker 1 = diarization label B

Part 2 – Speaker 2 = diarization label C

Part 2 – Speaker 3 = diarization label D

Part 2 – Speaker 4 = diarization label E

Part 2 – Speaker 5 = diarization label F


[00:15:00 – 00:15:20] Part 2 – Speaker 0: So whilst it’s true that Let’s say us appointed as those professional executive trustees can do all those things. We can also do them even if we’re not appointed. I think the key thing, and I’ll probably repeat this about 15 times during the course of the rest of the podcast, is that people should have a choice about


[00:15:19 – 00:15:21] Part 2 – Speaker 1: Mm-hmm.


[00:15:20 – 00:17:14] Part 2 – Speaker 0: this and they shouldn’t feel that they’re obliged to choose a professional or they shouldn’t be put into a corner or edged into a position where they think they’re not. I think there’s no other choice. plus sides but also let’s remember there is a choice about this thinking about another area where it can add value let’s say in terms of being a trustee professional trustee if let’s say you’ve got you’re the trustee of a trust fund where you’ve got vulnerable beneficiaries so vulnerable beneficiaries could mean you know a number of things it might mean you’ve got children or you might have disabled beneficiaries, you might have a situation where you’ve got a beneficiary who’s vulnerable because you’re concerned about their ability to manage money either at all or well. AI suggests we call that spendthrift concerns. So that’s quite a nice way of describing it. Actually thinking about those kind of scenarios, is there extra value from having a professional involved? Yeah, I think there could be actually. If you’ve got younger beneficiaries, children, disabled beneficiaries, again, you should have a choice about whether you appoint professionals or not, or whether you have family members and then they can delegate responsibility to lawyers or whoever to carry out actions. But I suppose on a longer term basis, it might be valuable to have that continuity to know that there’s going to be people who can carry out that function. They’re prepared to carry it over a number of years. And on this. The spendthrift concerns thing, I think there could be real value there. If you’re a lay trustee and you’re holding a fund for a beneficiary who’s a spendthrift, they’re just rubbish with money and you have a discretion over what they get out of the trust fund. I could imagine that if that beneficiary was somebody who was a family member or the child of a friend or a close acquaintance, it could put a lot of pressure on you.


[00:17:13 – 00:17:14] Part 2 – Speaker 2: Yeah


[00:17:13 – 00:17:48] Part 2 – Speaker 0: If you are in that position as a lay person and you’ve got that beneficiary every so often approaching you and for want of a better word pestering you to release funds to them and you know that the reason why it’s wrapped up in the trust is because they shouldn’t have too much released to them, but they’re putting that moral pressure on you. Now, if instead of that, you’ve got professionals who are trustees, then I think that can really help in that situation. because then the spendthrift beneficiary might still be approaching their family member or this lay person who’s involved. Maybe they’re a trustee, but they’ve got a co-professional


[00:17:47 – 00:17:49] Part 2 – Speaker 3: Yeah.


[00:17:48 – 00:18:34] Part 2 – Speaker 0: trustee and they can always say in those circumstances, well, look, I’m not the only person who makes the decision here. It has to be left or I have to discuss it with my co-trustee or I’m not a trustee at all. I hear what you’re saying. I’ll pass it on to the trustees, but they’re the ones who have the discretion and they’re the ones who make the decision. vision so acts as a cut out potentially it acts as you know taking away your hope a good deal of that moral pressure so I think that could provide some real benefit and I’ve seen that in practice and I’ve seen people also who have been trustees over a period of time and now they feel a bit exhausted by that you know having to deal with those kind of issues And they’re now ready to hand over to professionals. They’re


[00:18:33 – 00:18:34] Part 2 – Speaker 4: Yeah,


[00:18:33 – 00:18:51] Part 2 – Speaker 0: still happy to have the relationship with the beneficiary, but they want that cut out and they actually want to be able to say, these are not my decisions anymore. It is professionals who are making them. You need to speak to the lawyers. They’re not just administering it. They’re responsible for the decisions.


[00:18:50 – 00:18:51] Part 2 – Speaker 4: yeah


[00:18:50 – 00:19:03] Part 2 – Speaker 0: So we’ve talked about where we think it is that it might add value to happen. So how professional trustees and executives are examples of that. Ben, can you think of cases where it’s really not necessary at all?


[00:19:02 – 00:19:29] Part 2 – Speaker 5: Yeah, definitely. So in instances of small estates, for example, there just isn’t much need for a professional trustee or executor sometimes, and they just outweigh the value provided with the cost and the expertise required. It just is fairly straightforward and lay friendly and perhaps where there is still legislation within


[00:19:28 – 00:19:30] Part 2 – Speaker 0: Mm hmm.


[00:19:29 – 00:19:36] Part 2 – Speaker 5: the family already they might have experience within things like estate accounts which you’ve already mentioned


[00:19:35 – 00:19:36] Part 2 – Speaker 0: Yeah.


[00:19:35 – 00:19:50] Part 2 – Speaker 5: so if they’re an accountant perhaps they already have that skill set in place and it sort of leaves us redundant in that regard there’s no need for us to be filling out for them so yeah it just isn’t cost efficient. if you want to put it like that.


[00:19:49 – 00:20:58] Part 2 – Speaker 0: Absolutely agree. It’s got to be proportionate to have professionals involved. If you’ve got professionals who are actually appointed in those roles, executives and trustees, there are going to be fees. There’s no choice about that. There might be an element of choice or there might be a choice about how the fees are structured. But if you’ve got professionals involved, they’re going to have to charge for their time because they’re not a charity, they’re a business. And sometimes… it’s just not proportionate to have things at that level and you can’t justify and so you know I’ve had cases where you know you have got professionals who have been appointed either as executives or trustees but you can see that the value of the estate you know the assets are they don’t justify things at that level and so in those cases we’ve agreed or we’ve recommended you know that we we stand down we renounce as executives or Or if we have been trustees, maybe, on a case for a while, maybe the funds aren’t what they were and maybe it’s the case that the family who are the beneficiaries or there may be another lay trustee are starting to question whether it’s proportionate to have to keep paying fees at


[00:20:57 – 00:20:59] Part 2 – Speaker 5: Mm-hmm.


[00:20:58 – 00:21:05] Part 2 – Speaker 0: the level that they are to keep things running. We’ve taken the decision, OK, well, it doesn’t make sense for us to carry on.


[00:21:04 – 00:21:05] Part 2 – Speaker 5: Yeah.


[00:21:04 – 00:21:33] Part 2 – Speaker 0: We really should step. step down here why don’t you find some other lay people who can take over these roles and if possible yeah they can carry out the actual functions that need to be carried out themselves without having to delegate them to a professional or if they can’t do that at least they’ve got more choice about who they delegate those functions to or you know maybe they can slice and dice it you Yeah know they’ll do some things but you know the tax returns done by by a professional A professional.


[00:21:32 – 00:21:33] Part 2 – Speaker 5: Yeah, definitely.


[00:21:32 – 00:22:13] Part 2 – Speaker 0: Again, coming back to that point about choice. In the example I gave before, it was the one where you had lay trustees and then they wanted professional trustees to replace them. But it works the other way a lot of time. And there’s no point running the trust just so that it ends up just turning fees for professionals. That would be a terrible situation. But things need to be reviewed and they need to be stopped before anything gets to that point and a change considered. I mean, maybe even if there is the discretion to do it, not just change the trustees to lay trustees, but indeed possibly end the trust itself if


[00:22:12 – 00:22:13] Part 2 – Speaker 5: Yeah.


[00:22:12 – 00:22:26] Part 2 – Speaker 0: there is a discretion to appoint the capital out to the beneficiaries and there is no other overriding reason why you keep this capital tied up in the trust. If it is not going to be economic to run the trust, then end the trust


[00:22:25 – 00:22:27] Part 2 – Speaker 5: Yep.


[00:22:26 – 00:22:34] Part 2 – Speaker 0: would generally be my thinking. Certainly you’ve got to bring the cost and the proportionality of the cost into the whole discussion.


[00:22:33 – 00:22:44] Part 2 – Speaker 5: And ultimately, whatever’s in the beneficiary’s best interest, of course, the role of a trustee itself is a fiduciary duty.


[00:22:43 – 00:22:44] Part 2 – Speaker 0: Absolutely.


[00:22:43 – 00:22:50] Part 2 – Speaker 5: So their interest will always prevail. And that’s what should be at the forefront of the trustees’ minds.


[00:22:49 – 00:23:41] Part 2 – Speaker 0: Absolutely, absolutely. Yeah, no, that’s an extremely good point. And just because something has been economic in the past or it’s run in a particular way for a number of years does not necessarily mean that it has to run in that way forevermore. Absolutely. Okay, that’s really good advice. Bringing back this theme of having choice, that’s always fundamental and this is not a new. A new thing that we’re talking about in this podcast, we’ve talked about this before and bringing back this point about proportionality in terms of cost. Let’s talk about cost and transparency and value in the context of professional trustees or administrative trusts or estates for that matter. Again, you’ve started to have a bit of experience of working on pricing with estates, maybe not on. on a trust, yeah, but it’s similar principles.


[00:23:40 – 00:23:42] Part 2 – Speaker 5: Yep.


[00:23:41 – 00:23:52] Part 2 – Speaker 0: So having had that experience, say for a couple of weeks, do you want to give from the hip brief summary of what you think are approaches to pricing?


[00:23:51 – 00:24:24] Part 2 – Speaker 5: Yeah, definitely. So from the off, I’ve been very aware that all the pricing we do for estates and trusts is on a bespoke basis. So it’s on a case by case basis. What you need specifically and what I’ve been doing a lot and I’ve had a lot exposure to is actually using formulas to work out how much time is going to be spent on certain responsibilities, who will be carrying those out and ultimately how much that will cost our client for us to perform those duties for them.


[00:24:23 – 00:24:29] Part 2 – Speaker 0: Yeah, but very good based on the time based on who’s going to be performing it people having different hourly rate You’re


[00:24:28 – 00:24:29] Part 2 – Speaker 5: Mm


[00:24:28 – 00:24:29] Part 2 – Speaker 0: right.


[00:24:28 – 00:24:30] Part 2 – Speaker 5: -hmm. Absolutely.


[00:24:29 – 00:24:40] Part 2 – Speaker 0: And like you said, formulas, that’s how we calculate it. So the point about that, I suppose, is that what you want your pricing to be is transparent.


[00:24:39 – 00:24:40] Part 2 – Speaker 5: Absolutely.


[00:24:40 – 00:24:55] Part 2 – Speaker 0: So if somebody says, I’d like you to do this, you have a discussion with them and find out what it entails, what you can do, what you can’t do, and then you scope out the work and depending on who’s going to be doing it and there may be different. different people working on different aspects


[00:24:54 – 00:24:55] Part 2 – Speaker 5: Yep.


[00:24:54 – 00:25:35] Part 2 – Speaker 0: of it then you work out what the price is going to be based on all the criteria that you talked about and then you give the client some element of choice in that preferably you give them fixed fee options and you don’t do anything before they’ve had a look at what the price is and then said yes I want to proceed and yes I want price option A or price option B or you know maybe they say no I don’t want to proceed fine so I think that’s a really transparent way of dealing with things but that isn’t the way that all trust or estate practitioners work some of them will have kind of scale fees some of them will have fees that relate to the actual value of the assets that they’re administering the


[00:25:34 – 00:25:35] Part 2 – Speaker 5: Mm


[00:25:34 – 00:25:50] Part 2 – Speaker 0: thing that will do where even where we’re appointed as executives and trustees so let’s say you Ben are administering the estate of Joe Blogs and Joe Blogs has appointed Lanyon Bowler or the partners of Lanyard Bowdler as executives.


[00:25:49 – 00:25:51] Part 2 – Speaker 5: Mm-hmm.


[00:25:50 – 00:26:43] Part 2 – Speaker 0: You, Ben, your client is the partners of Lanyard Bowdler. Well, great. So what, you agree the price with the partners of Lanyard Bowdler? Well, that’s not very transparent. What we try to do is say, right, well, who are the beneficiaries? And then in that scenario, we will liaise with the beneficiaries and we’ll go through the same pricing process and the scoping and the choice. that we just talked about there but this time we’re doing that with the beneficiaries sometimes that can be difficult because there are you know lots and lots of beneficiaries so it might be you have to go with a majority view or you have to go with well we’ll default to this hourly rate at treatment but we think it will fall within this range but that’s how we like to work so it’s as transparent as we can be if we’ve got charitable beneficiaries we liaise with the charities and say this is how we’ve scoped it and here is this choice it might


[00:26:42 – 00:26:44] Part 2 – Speaker 5: Yep.


[00:26:43 – 00:27:13] Part 2 – Speaker 0: be that you know here’s a fixed fee or here’s the hourly rate option we think it falls within these ranges but it’s not a fixed fee so you’re trying to be as transparent as you can and the point I’m trying to get to there is that even when we’re appointed as executives and trustees and we ourselves are our own own clients we are trying to be transparent about that pricing process and we are trying to give choice and put decision making in the hands of the people who the funds actually affect i.e the beneficiaries but


[00:27:12 – 00:27:14] Part 2 – Speaker 5: Yep.


[00:27:13 – 00:28:49] Part 2 – Speaker 0: that’s not something that every firm will do they you know there’ll be some firms or there’ll be some practitioners who say well here it is take it or leave it we’re doing on an hourly rate basis or here it is here are these scale fees the drawback then is if they are your your professional executives and trustees you don’t have a choice about that and even if you say well you know well I’m really not happy about this I really therefore don’t want you as my professional trustee or my professional executor can you resign or can you renounce can these other people be appointed if it’s the case of trustees you can’t force the professional person to do that you know so then well can I take them to court and have them removed removed. You can take them to court and hope that the court will remove them if they’ve done something wrong, but if they’re executives and you’re just at the start of the administration of estate process, they haven’t done anything yet, and if it’s the start of the process, there’s no reason why they would have done, a court’s not going to remove them. So transparency, openness, and having a free choice about one who is appointed and two, you know, if if they are appointed the kind of pricing structure they’re going to have it’s not a free choice arrangement where you’ve got professionals who are appointed now we we try to keep it as transparent and as open and have that choice as much as we can but it’s not the same if we’re appointed or if you’ve got professionals appointed as trustees or executives it’s not the same as if it’s family members who then can say, right, well, we want to use this firm


[00:28:48 – 00:28:49] Part 2 – Speaker 5: Yeah.


[00:28:48 – 00:30:00] Part 2 – Speaker 0: and what price can you do for us? Okay, fine, we’re happy with that. Or no, we’re not, we’re going to go somewhere else. So that’s really, really, really important. And we’ve talked about that in podcasts before and you can’t really stress that enough. And I’m not saying we’re perfect, but I do think that’s a strength of the firm, the approach to the pricing and this attempt to make it as transparent. and is user-friendly and give beneficiaries as much choice as we can. I do think that’s a real positive because the contrast with the kind of the worst case scenarios in that is that you’ve got no choice at all and you’ve got maybe a practitioner or a set of practitioners who really aren’t very good, don’t really care about client service. And you are stuck with them. And actually, for want of a better word, may well be just kind of churning the fees during that process of getting you from the A, which is the start of the matter, to the Z, which is the completion of the matter. All you see or all you feel you’re seeing is just, you know, like the ticker going around, you know, when you’re at the.


Part 3 [00:30:00]

Speaker mapping:

Part 3 – Speaker 0 = diarization label A

Part 3 – Speaker 1 = diarization label B

Part 3 – Speaker 2 = diarization label C

Part 3 – Speaker 3 = diarization label D

Part 3 – Speaker 4 = diarization label E

Part 3 – Speaker 5 = diarization label F

Part 3 – Speaker 6 = diarization label G

Part 3 – Speaker 7 = diarization label H

Part 3 – Speaker 8 = diarization label I

Part 3 – Speaker 9 = diarization label J

Part 3 – Speaker 10 = diarization label K

Part 3 – Speaker 11 = diarization label L

Part 3 – Speaker 12 = diarization label M

Part 3 – Speaker 13 = diarization label N

Part 3 – Speaker 14 = diarization label O

Part 3 – Speaker 15 = diarization label P


[00:30:00 – 00:30:01] Part 3 – Speaker 0: short pump


[00:30:00 – 00:30:01] Part 3 – Speaker 1: Hmm.


[00:30:00 – 00:30:29] Part 3 – Speaker 0: at the moment with the price just going up and up and up and you even maybe get to the point where you’re frightened to call them or email them because you just think that’s just going to add another few hundred pounds to the fees which is very much not would not feel like a very transparent relationship so the cost thing can be a real downside and I don’t want to have a pop at any particular organisations but there are a few that I’ve come across they tend not to be solicitors


[00:30:28 – 00:30:29] Part 3 – Speaker 2: Yeah.


[00:30:28 – 00:32:41] Part 3 – Speaker 0: because they’re kind of more tightly regulated in terms of how they approach pricing, how they interact with clients and their complaints procedures, et cetera, et cetera. But, you know, not to say that there are some cowboys out there, but there are some cowboys out there in my experience. So that’s a really important consideration. Some of that discussion about cost might have sounded a bit negative. And I’m thinking of reasons why you might not want to do something. And I’m going to carry on now or we’re going to carry on having a discussion about some case studies and actually a theme that might emerge from this or one of the questions you might ask after hearing about some of these case studies is why would you ever want to appoint a professional trust your executive after hearing these tales that we’re going to tell, which may be fair comment. But I suppose the point is the thing that distinguishes these cases from what I think is the ideal is the lack of choice, the lack of choice at the outset that has led to the situation that the beneficiaries find themselves in, I think. And this point about there are good reasons why you might appoint professional people as your executors and trustees. I mean, one of them might be you haven’t got anybody else you can appoint. You can appoint, you might not have family members, you might not have friends, you should have a choice about this and it should be an informed choice. So we did a podcast probably a couple of years ago now about a case where somebody was a beneficiary of a trust where an uncle and an aunt had got in the grip of not a firm of solicitors, another outfit. They had… got wills prepared for them by this outfit and they got trusts prepared as well. I don’t know this for certain, but I would imagine that when they had the discussion about what the will instructions were, what was going to be in the trust, at no point was it really drawn to these people’s attention that they were not really getting a full choice about whether this organisation itself was going to be appointed as their trustees. I mean, it might have been somewhere buried away in the paperwork, but they would have been kind of manipulated into


[00:32:40 – 00:32:42] Part 3 – Speaker 3: Yeah.


[00:32:41 – 00:33:27] Part 3 – Speaker 0: making them their executives and trustees, which they did. And I don’t think manipulated is too strong a word. There needs to be a full and frank discussion about that, about the pros and the cons, the ability for clients at that stage to be able to ask questions, to not feel like they’re asking. silly questions because no question is silly in that context and not to feel like there’s some moral obligation upon them to appoint their advisor in that capacity the result of it was that when it came to winding up these trusts it took forever and the beneficiary involved ended up you know they felt like they were banging their head against a brick wall every time they had to make contact with this organisation And


[00:33:26 – 00:33:28] Part 3 – Speaker 4: Hmm.


[00:33:27 – 00:34:53] Part 3 – Speaker 0: there was no question about it that this trust had to be wound up and this estate had to be wound up. There wasn’t a choice about keeping it going, and nor did the beneficiary want it to be kept going. So it needed to be wound up, but it took forever. And yes, they felt like they were butting up against the brick wall. Eventually, to compound the cost of… you know, that was being pulled out of the trust fund anyway to deal with this administration of winding it up. The beneficiaries felt they got no choice but to instruct us. to act on their behalf to try and get this organisation to finish the job, which we did, and it cost quite a bit for the beneficiary to have to do that. And we did and we succeeded, but it took us two years to get to the point from the clients already in absolute desperation to the point at which this organisation finally finishes the last bit of work that they need. They needed to. And I think that had the test data in this case, you know, the settlers, had they understood the implications of appointing these people who they had no relationship with other than it just so happened that they were preparing their wills for them. And even then, I’m not sure quite how that happened. They’d probably been introduced by some other professional who was doing something for them. I think


[00:34:52 – 00:34:54] Part 3 – Speaker 5: Yeah.


[00:34:53 – 00:35:23] Part 3 – Speaker 0: there’s no way that they’d have appointed these people and they probably hadn’t realised that they’d appointed them. So that’s, all these things are anonymised obviously for obvious reasons, but that’s one really, really bad experience and it’s only one of a few I’ve seen. But I’ve got one that’s just sort of arrived with us where I’m hoping that things will pan out in a nice business-like way. But based on my experience of dealing with this organisation previously where they are trustees,


[00:35:22 – 00:35:24] Part 3 – Speaker 6: Mm


[00:35:23 – 00:35:24] Part 3 – Speaker 0: and


[00:35:23 – 00:35:24] Part 3 – Speaker 6: -hmm.


[00:35:23 – 00:35:27] Part 3 – Speaker 0: unfortunately it’s the same organisation as the one I’ve just been describing,


[00:35:26 – 00:35:28] Part 3 – Speaker 6: Yep.


[00:35:27 – 00:35:49] Part 3 – Speaker 0: you have to say to the client who’s now approached us, okay, well based on our experience you may be in for a long haul here. And in this particular case, the clients have got a trust that this organisation has recommended that they have. This is a side issue. But I’m not sure it was ever really something that should have been recommended for them, but we won’t go down that


[00:35:48 – 00:35:49] Part 3 – Speaker 7: No.


[00:35:48 – 00:36:19] Part 3 – Speaker 0: road today. But they have, as part of the process, appointed this organisation as professional trustees. They themselves are trustees, but they have this organisation as their co-trustees. Now, I think in their particular case, I can kind of see why they’ve done it. And I think they probably made a conscious decision. to do that because of what they wanted to do at the time which was not a standard when we die we want everything to go equally between our children


[00:36:18 – 00:36:20] Part 3 – Speaker 8: Mm-hmm.


[00:36:20 – 00:37:33] Part 3 – Speaker 0: but things can change and things do change and you can’t predict how things are going to pan out 10 years down the road from you know what you thought might be the case a decade ago And in this particular case, these particular clients want to deal with things in a different way between their family and actually they’re back in the realms of our circumstances now are that yes when we die we do want an equal division between all of these children they came to me and they said well how do we how do we get it so that we can we want to wind these trusts up because we don’t think they’re fit for purpose anymore ignore the question of whether or not they ever were fit for purpose but they they now want to wind them up i say well you you know you can do it and these trusts are discretionary trusts so the trustees have the power to do what you want to do along the way we need to discuss the implications from a taxation perspective of what you want to do and what we’ve got to navigate to get you from A to C but having gone through all that if you still want to end the trust the trustees have got the discretionary power to do so but your problem is you’ve got these co-trustees and what happens if they don’t agree that what you want to do is


[00:37:32 – 00:37:33] Part 3 – Speaker 9: Yeah.


[00:37:32 – 00:37:58] Part 3 – Speaker 0: what is what should be done now i’m hopeful that they will not take that view i don’t think they will take that view but even if they take the view of that’s absolutely fine mr and mrs blogs we will cooperate with you in ending these trusts what our clients don’t have any control over is what’s going to be the fee structure what they’re going to have to pay to this organisation


[00:37:57 – 00:37:58] Part 3 – Speaker 10: Yeah.


[00:37:57 – 00:38:08] Part 3 – Speaker 0: to end this trust and and not only that they don’t have a control over you know how long these people are going to take and our experiences they could take a while


[00:38:07 – 00:38:09] Part 3 – Speaker 11: Yeah.


[00:38:08 – 00:38:31] Part 3 – Speaker 0: to deal with things when you’ve decided you want to do something you want to get it done as soon as you can so so that’s uh that’s that’s a fresh uh case study and i’m hopeful that it will all end up being rosy and light and everything will move along speedily and we’ll not get any pushback or any difficulties from this other organisation. Hope for the best, prepare for


[00:38:30 – 00:38:31] Part 3 – Speaker 12: Yeah.


[00:38:30 – 00:39:31] Part 3 – Speaker 0: the worst. Working within that kind of framework, that’s what we need to do. And we’ve talked about cases where professional trustees can add value and there can be those cases and probably they did at the outset of this trust, but 10 years on. They are not. But there’s nothing that these clients can do to force these trustees either to do what they want or to step down short of going to court. But again, if they did go to court because they didn’t like the response they were getting from this organisation, there’s no guarantee that they would be successful. Just because they want to do something doesn’t necessarily mean that these trustees have done anything that actually justifies their removal as trustees. Okay, so before we wrap up then, Ben, is there anything else that you brought with you that you wanted to say or have you got any further comment maybe on that last segment? I know it’s difficult for you because you’ve not actually experienced any of these matters yet or had any case studies of your own.


[00:39:31 – 00:39:54] Part 3 – Speaker 13: No, I don’t have anything to add. I don’t think it’s just touching on your points again of transparency, you know, deciding what’s right and what’s wrong, what you need on a holistic basis and yeah, just looking for whether you want certainty or whether it’s actually entirely necessary to appoint professional trustees and executives, but hopefully this is. This is giving you the guidance that you might need.


[00:39:53 – 00:41:42] Part 3 – Speaker 0: I would agree with you there about the transparency and the choice point, looking at everything in the round before you make that decision and allowing the clients to make an informed decision. So excellent points and everything that you’ve contributed to today has been absolutely brilliant. So thank you very much. I can see why you were a guest on the Breadstick Emanuel podcast, which I shall. Go and find now if your contribution to the breadstick and Manuel podcast was even half as good what you’ve done today with only a couple of weeks experience in the private client field they’ll be worth they’ll be worth listening to so thank you very much indeed Ben I will just reiterate that point until the podcast listeners are sick to death of hearing it for one final time time that it’s all about choice it’s all about transparency there are pros and there are cons about having professionals appointed as executives and trustees but the key thing is that the person who’s in control of appointing them whether that’s the testator of the will at the time they write the will or the settler of the trust at the time that they create the trust should be properly advised about the pros and the cons be allowed to ask questions not feel that they’re doing anything wrong by not appointing a professional and only after they’ve gone through that process then allowed to make an informed decision about whether they do actually appoint professionals And finally, that all important cost point. Cost is a key part of it. Cost transparency and cost proportionality. So thank you once again, Ben.


[00:41:41 – 00:41:42] Part 3 – Speaker 13: Fantastic.


[00:41:41 – 00:41:46] Part 3 – Speaker 0: And I hope that you’ll join us again on a further podcast


[00:41:45 – 00:41:46] Part 3 – Speaker 13: Absolutely.


[00:41:45 – 00:41:52] Part 3 – Speaker 0: at some point or perhaps even present your own or even your own miniseries. I don’t know. Anything is possible.


[00:41:51 – 00:41:55] Part 3 – Speaker 13: Who knows? Thank you. Boom.


[00:41:54 – 00:42:14] Part 3 – Speaker 14: Thank you to Edward and to Ben for sharing your expertise, yet more proof that lawyers don’t bite. If you have a legal issue you’d like me to put to our team to cover in an upcoming episode, please let me know by visiting lvlaw.co.uk forward slash knowledge where you can search for all our podcasts. That’s lvlaw.co.uk forward slash knowledge.


[00:42:14 – 00:42:18] Part 3 – Speaker 15: That was the legal lounge from Lanyan Bowdler Solicitors.