It begins at home: charitable giving and solicitors - a roundtable

Legacy income is currently worth more than £2.8 billion a year and is the largest single source of voluntary income to the charities sector. So why does a lingering resistance remain in some quarters of the profession to discuss charitable giving with clients? Can it ever become a standard part of the conversation when making a will?

These were just two of the questions tackled by a Private Client Section / Remember a Charity (RAC) roundtable on legacy giving, held at the Law Society on 11 June.

Chaired by Gary Rycroft, former chair of the Section and partner at Joseph A Jones & Co in Lancaster, the roundtable included the then vice-president of the Law Society Christina Blacklaws, law firm partners, solicitors working in both private client and charity law, and representatives from professional bodies including RAC, the Institute of Legacy Management (ILM) and the Society of Trust and Estate Practitioners (STEP).

The roundtable began with a list of statistics. According to 2016 research by RAC, 60 per cent of solicitors feel able to raise the issue of charitable giving with clients. Discussion was focused on the other 40 per cent, and various explanations offered for their reticence to begin a dialogue: a lack of fluency in charitable and philanthropic issues, the risk of alienating or offending the client, and the potential complexities of dealing with multiple charitable beneficiaries further down the line were all mentioned.

Ian Bond, chair of the Law Society’s Wills and Equity Committee, made the point that in an era where the public conflates the value of a will with the cost of making one, those law firms running will-writing as a loss leader will often bypass the conversation on legacy giving for the sake of expediency. Both charities and solicitors have a role to play in educating the public on the purpose and value of a will. ‘It is the most important document that you write, and yet many expect to get it for nothing,’ remarked Chris Millward, ILM chief executive.

Will-making schemes

National will-making schemes, often led by larger charities, tend to muddy the waters further, and received short shrift from many attendees. ‘If these schemes typically charge £90 a will, that’s pulling people in the wrong direction,’ said Bond. ‘Quoting these kinds of prices devalues what a solicitor does.’

‘They do the consumer a disservice,’ agreed Leticia Jennings, partner at Bates Wells Braithwaite. ‘If the public are being encouraged to race to the bottom on price, they are not doing themselves any favours.’

Some solicitors mentioned that their firms preferred to partner with local charities. ‘My firm works with local hospices and we give our time for free. We have a designated person who looks after those people who want to make wills. You can't do that with national schemes where you speak to a faceless person over the phone,’ remarked Bond. ‘What works on a local basis won’t work nationally.’

The consensus in the group was that in the will-writing market, it is precisely the value that solicitors can bring to the conversation by offering the full benefit of their advice that sets them apart. ‘The market will continue to become broader and more diversified. Solicitors need to demonstrate why they are operating at the quality end of the market,’ argued Chris Millward.

The Solicitor-General, Robert Buckland, had been invited to the event, but was unable to join on the day. There were still many opinions raised on what more the government could be doing, including educating the public on the dangers of intestacy. Leticia Jennings suggested that the government could remind people of the merits of making a will at key life moments. If it can get involved in someone’s life when they register a marriage or buy a house, how hard can it be to make a will prompt now and again?

‘If we want charitable giving in wills to become the norm, being prompted at the points where it perhaps isn’t as relevant becomes something you accept. It is about the constant prompting during your 'journey' that will become more relevant during different life stages,’ commented Alex McDowell, chair of RAC.

Tax and financial incentives

Tax and financial incentives were also discussed. In 2017, RAC led a campaign to make charitable wills exempt from VAT and for the government to reconsider its plans for a rise in probate fees (which the government dropped before the June general election). The idea of an exemption from probate fees was also a popular one (indeed, it has already been proposed by ILM).

‘The point here is that if there is an actual saving to the client due to charitable giving, there is far more likelihood the solicitor would bring it up because it's beneficial to the client. Giving to charity becomes something your client needs to know about,’ said McDowell.

That said, a hard sell on the tax planning benefits could have a counter effect, especially when many people baulk at the perceived cost of making a will in the first place. ‘Issues of tax are generally off-putting,’ remarked Alison Talbot, head of charities at Penningtons Manches. ‘Mentioning to clients that they could save on inheritance tax will cause many to stop listening straight away. Better to have a positive story ready as to why making a will helps you have control over your assets and helps protect your family.’

The problem, as many saw it, is the inconsistent approach taken by solicitors in discussing legacy giving. While there is guidance to refer to, including the joint Private Client Section / ILM publication Charities as Beneficiaries, now in its third edition, the roles and obligations of solicitors and charity legacy professionals, and how they can work together to maximise the value of bequests to charity, remain misunderstood. Combined with the somewhat fractious historical relationship between solicitors and legacy officers, it’s clear that more needs to be done to bridge the gap in knowledge, trust and understanding between both sides – even if that is just a one-page piece of standard industry guidance.

‘This could be a very simple way to take away the fear of those solicitors who don’t recommend giving to charities because they mistakenly believe that dealing with charity legacy officers will be a nightmare,’ remarked Ian Bond.

The Law Society's role

The Law Society could also be doing more in terms of taking a more active role in upholding compliance and standards, argued Millward. ‘It’s not like we haven’t sat down and tried to address these issues before.’ The Society is not the regulator, however, and it can only go so far in promoting best practice – and reducing providing advice on charitable giving to a mandatory tick-box exercise helps no one.

There are no easy answers or single solution, and the general impression was that it would take a number of interventions from a mix of stakeholders to crack the issue, driven by solicitors, charities, professional bodies and the government speaking as one voice.

But just as importantly, the public need to buy in, too, and that means starting to take wills seriously. The conversation needs to move forward several gears, said Alison Talbot. ‘We need to stop referring to a will as just a piece of paper, like a cheque or a form – it represents your life and how it's going to be dealt with.’

Duncan Wood is an editor at the Law Society and editor of PS, the magazine of the Private Client Section.

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