1.1 Who should read this practice note?
Practitioners preparing a will or lifetime gift for a client who wishes to leave a gift to:
- the person preparing the will or lifetime gift, or supervising its preparation;
- a member of the immediate family of the person preparing or supervising the preparation of the will or lifetime gift;
- a partner or employee of the business entity preparing the will or lifetime gift,
- a member of the immediate family of that partner or employee; and
- someone closely connected with the business entity preparing the will or lifetime gift.
1.2 What is the issue?
Preparing a will or lifetime gift for a client can be a sensitive area. It is easy for those who receive less than they were expecting to allege improper influence, particularly if the client is giving property to you or someone connected with you. Your firm should therefore have safeguards in place to protect it from such allegations.
2 Preparing the will or lifetime gift
No one can foresee or address every issue or ethical dilemma which may arise. Outcomes-focused regulation requires you to consider how best to achieve the right outcomes for your clients and therefore comply with the principles.
When preparing a will or lifetime gift for client, you must have regard to outcome 1.1 of the SRA Code, which requires you to treat your client fairly.
Indicative behaviour 1.9 in the SRA Code suggests that you consider refusing to act, if your client, without taking independent legal advice, proposes to make a gift of a significant value to:
- a member of your family
- a member of your firm, or
- a member of your firm's family
Guidance on how to decide if a gift is 'significant' is provided in section 4.1.
A 'member of your firm' is not defined for these purposes, but it would appear to include any employee of the firm.
There may be significant circumstances in which it would be appropriate to accept instructions from a client who is related to an employee or partner and who proposes a significant gift to that employee or partner or a member of their family. However, you should take into account the reasonable expectations of others who would be reasonably expected to benefit because of their relationship to the deceased.
In such a case, you should make detailed file notes, recording the full circumstances of the client's family and explain why the significant gifts are appropriate given the circumstances. It may be necessary to warn your client that the gift might be questioned later by people who suspect that you took advantage of your or your staff member's close relationship with the client, to influence the gifts made by the client.
Even if you consider the instructions to be appropriate, before preparing the will you should consult your firm's compliance officer for legal practice (COLP), or the senior responsible officer (SRO) if your firm is a member of the Wills and Inheritance Quality Scheme (WIQS), or a senior experienced practice member. The person consulted must consider potential conflicts of interest and the best interests of the client.
The COLP, SRO or a senior experienced practice member should consider whether in the circumstances you should not act, unless the client:
- obtains independent legal advice from someone completely unconnected with your firm; and
- provides written confirmation that they have obtained such advice.
For further matters the COLP, SRO or a senior experienced practice member should consider, please see 4.5 below.
The COLP, SRO or a senior experienced practice member should ensure that a written summary of the matters considered, the decision as to whether or not it is appropriate to act and any further steps to be taken is prepared. You should place the note with the file.
In some circumstances, it may be appropriate for you to continue to draft the will or lifetime gift, even if the client has not received independent legal advice. The SRA Guidance on the Drafting and Preparation of Wills provides the example of a situation where you are drafting wills for your parents and the survivor of them wishes to leave the residuary estate to you and your siblings in equal shares.
3 Staff members
You should also be cautious if you are preparing a will or a lifetime gift for a staff member or their immediate family. Remember that they too will be classed as a client, and the principles stated above still apply.
4.1 What is a significant gift?
An amount may be significant in itself, or as a proportion of the client's net estate.
The SRA Ethics Guidance on the Drafting and Preparation of Wills does not provide any indication of a monetary amount which would be considered significant.
You should carefully consider any gift worth more than £500 to determine whether it may be considered significant in the particular circumstances.
You can assume that the following gifts would be considered significant:
- anything worth more than one per cent of the client's current estimated net estate, and
- anything that might become more valuable at some point, especially after the death of the client, and anything that provides a benefit to an individual which is more valuable than their relationship to the deceased reasonably justifies.
You should exercise great care if the proposed gift in question is a specific item or items which has an uncertain value, like a painting or piece of furniture. If you are in doubt, ask your COLP, SRO or a senior experienced practice member.
You should refer any other proposals which might appear unusual in the circumstances to your firm's COLP, SRO or a senior experienced practice member. For example, if a client proposes to make a gift to you, by will or lifetime gift, that you rightly decline, and they then direct that bequest or gift to a charity you support, but they have no recognisable connection with, you should refer this to your COLP, SRO or a senior experienced practice member.
You should also refer any compliance concerns to your COLP, SRO or a senior experienced practice member, for example, if the client inserts a beneficiary connected with your firm into a class of discretionary beneficiaries listed in a will or lifetime trust, without giving any significant reason for the insertion.
4.2 Who is a member of a family?
Family relationships can be complicated, but for this purpose the term includes:
- anyone who would be a potential beneficiary under the intestacy rules;
- the spouse or civil partner of potential beneficiaries;
- long term cohabitees or dependents;
- step-children; and
- anyone able to bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975, or their spouse, partner or long-term cohabitee.
Whenever you are in doubt about compliance issues, ask your COLP, SRO or a senior experienced practice member.
4.3 How will I know if a proposed beneficiary is employed by or related to someone employed by the firm?
When taking instructions for a will, you should ask the following questions:
- Do any of the people to whom you wish to leave property work for this firm?
- Are any of the people to whom you wish to leave property related to, married to or have a close connection with people who work for this firm?
4.4 Does this policy mean that I cannot prepare a will for a close family member if it benefits me or a family member?
You will normally be able to prepare a will in your own time without charge for a family member, even if it benefits you or a family member, if the benefits received are not disproportionate and the COLP, SRO or a senior experienced practice member has noted any compliance concerns that may arise, in your firm's records.
If you use any of the firm's time or resources, such as precedents, in preparing the will, you may want to check with the firm's COLP, SRO or a senior experienced practice member.
4.5 What should a COLP, SRO or a senior experienced practice member consider ?
The factors the COLP, SRO or a senior experienced practice member should consider will vary depending on the circumstances of the case, but should include:
- how the proposed will or lifetime gift may be perceived by others who benefit, or might reasonably have expected to benefit, from the client's estate; and
- whether the person preparing the will or lifetime gift and the firm have adequately documented the factors which led them to accept instructions.
That decision should be properly recorded and details kept with the will or relevant file so that they can be produced later if needed.
We have published a practice note that describes how files, including these records, should be retained at the firm. For more information visit the File retention: wills and probate practice note.
4.6 What if I am a sole practitioner?
If you are the sole owner of the business, you should consider whether it is appropriate to act, bearing in mind your responsibility to avoid conflicts of interest and act in the best interests of your client.
As a sole practitioner, the circumstances under which you can take instructions for a will or lifetime gift may be more limited because of the obligations placed on you by the Code of Conduct 2011. Under the SRA's outcomes-focused regulation you will be expected to be able to demonstrate your compliance with the same Principles and Code of Conduct as larger firms but your evidential opportunities may be reduced as you are both the solicitor, with conduct of the client's matter and the COLP or SRO.
However, if after assessing matters and your obligations, you choose to act, you should keep detailed records and evidence of how you have compiled with your regulatory obligations under the following:
- Outcome 1.1 - you treat your clients fairly;
- Outcome 1.15 - you properly account to clients for any financial benefit you receive as a result of your instructions;
- Principle 2 - You must act with integrity;
- Principle 3 - You must not allow your independence to be compromised; and
- Principle 6 - You must behave in a way that maintains the trust the public places in you and in the provision of legal services.
Whilst each situation should be risk assessed individually you may wish to consider the following:
- declining the instructions;
- having the will executed by the client at the offices of another firm of solicitors in your absence;
- ensuring the client obtains independent legal advice from someone unconnected to your firm; and
- writing to the client explaining that there is no obligation on them to make a gift to you and ask them to confirm in writing that they wish to continue with the gift.
As with complaints handling best practice, Sole Practitioners may wish to agree arrangements with another Sole Practitioner or firm, to assist with the above.
As a matter of good practice the evidence should be retained until after the death of the client or any subsequent will.
5 More information
5.1 Practice Advice Service
The Law Society provides support for solicitors on a wide range of areas of practice. Practice Advice can be contacted on 0207 320 5675 from 09:00 to 17:00 on weekdays or email email@example.com
5.2 Professional ethics helpline
The Solicitors Regulation Authority's professional ethics helpline gives advice on conduct issues.