Legacies Roundup | June 2018


Charity, Charity Legacies

In this edition of the Legacies Roundup, we reflect on recent legacy events including the ILM Conference 2018 and the Legacy Strategy Summit, review recent cases on beneficiaries’ rights to information and the test for testamentary capacity, and discuss how to ease into the now in-force GDPR with a useful article covering key issues for legacy professionals.

ILM Annual Conference 2018 in association with Bates Wells Braithwaite

We were delighted to partner with the ILM at this year’s annual conference in May. Since then, we have been grateful for all the very positive feedback received, and have spoken with many of you about the topics discussed and how you can best apply the learnings to your organisation.

The conference covered a wide range of topics, from a timely and engaging update on the now in-force General Data Protection Regulation (GDPR) (yes, it is possible for data protection to be engaging!), to suggestions on why – and how – a charity might turn down a legacy. Delegates were treated to case reviews discussing the ever-important issues of testamentary capacity and proprietary estoppel, an overview of why legacies that involve property require careful consideration, what a charity can do if faced with a difficult executor, as well as some helpful insights into the possible PR consequences of estate litigation.

A panel of legacy experts, including BWB’s Leticia Jennings and Sophie Cass, discussed threats and opportunities for charities around the issue of will writing, whilst Toby Scott from Dying Matters covered public attitudes towards death and dying. Predicting a 20% rise in the number of legacies by 2026/2027, Legacy Foresight’s Meg Abdy issued a helpful external market update, whilst ILM’s Nichola Sims provided a thought-provoking (and at times hilarious) session entitled “5 things to do Before I Die”. BWB’s sessions included impromptu polls, to ensure as much delegate participation as possible.

Leticia Jennings, BWB partner and co-lead of our Legacies, Trusts & Probate Disputes team said: “We thoroughly enjoyed being part of this year’s conference, and were so pleased that delegates found the topics discussed engaging and, importantly, relevant to their roles as legacy professionals. There was a lot to cover and it was a great opportunity to catch-up with clients and colleagues. We have put some additional material on our website to supplement our sessions”.

You can find all conference session summary notes here and you can read our answers to ILM delegates’ questions here.

Other events

Leticia Jennings recently participated in Remember A Charity’s roundtable at the Law Society, discussing best practice for solicitors when talking to individual clients about their charitable giving. She also moderated a panel discussion on the future of will-making at the inaugural Legacy Strategy Summit.

In Leticia’s experience as a dispute resolution lawyer advising charities on legacy disputes, these are key issues for charities who, as beneficiaries, ultimately benefit from robust and well drafted wills, and from testators receiving appropriate advice on issues such as how to avoid disputes down the road.

You can read Leticia’s blog on these issues here.

Legal Update

Beneficiaries’ rights and access to information – Lewis v Tamplin

A recent case clarifying the extent of beneficiaries’ rights to information will be helpful to legacy practitioners.

It is well understood that a beneficiary has a fundamental right to have a trust administered in accordance with the trust document and the law. To ensure this happens and to enforce their rights in the event of a breach, beneficiaries often require access to different types of information. So exactly what types of information might beneficiaries require and what does the law say about how and when beneficiaries can access it?

It is well established law that adult beneficiaries who have an interest in possession under a settlement are entitled to know that the trust exists, as well as the nature of their interest under it (Brittlebank v Goodwin (1868) LR 5 Eq 545). This is also true for potential beneficiaries of discretionary trusts (Chaine-Nickson v Bank of Ireland (1976) IR 393). Trustees (including executors) are also obliged to be ready with their accounts.

But what about other types of information?

The case of Schmidt v Rosewood in 2003 established that beneficiaries have a right to information not because of any proprietary right, but because trustees have a fiduciary duty to keep beneficiaries informed and to provide accounts. Beneficiaries have a legitimate expectation of disclosure, and a failure or refusal to disclose information opens trustees (including executors) up to risks as to costs should the courts disagree with the trustees’ decision.

But are there still instances where trustees are exempt from disclosure of certain types of information? The recent case of Lewis v Tamplin & Ors [2018] EWHC 777 (Ch) clarifies the position.

In this case, the High Court criticised the three trustees of the Tamplin Trust: Edward Tamplin, his sister Jane Wayne, and his son Mark Tamplin. The beneficiaries of the Tamplin Trust had requested various pieces of information regarding the trustees’ dealings with 12.3 acres of land at Panteg Farm in Glamorgan, in order to determine whether the trustees had acted properly. The trustees had refused to provide this information, arguing that the beneficiaries already had sufficient information. The court exercised its supervisory jurisdiction over trusts and ordered the trustees to disclose information about the management of the trust to the beneficiaries. The court held that whilst trustees might not be obliged to disclose the reasons for their decisions when exercising any discretionary powers they might have (such as how to distribute trust property), this exemption did not apply to the trustees’ exercise of their administrative powers.

The court held that trustees cannot unreasonably withhold access to such information, which provides beneficiaries – including charities – with further recourse should trustees not be forthcoming.

Court confirms test for testamentary capacity – James v James and others [2018] EWHC 43 (Ch)

An individual must have a specific level of mental capacity in order to make a legally valid will – known as “testamentary capacity”. The common law test for proving testamentary capacity is known as the “Banks v Goodfellow test” – formulated in 19th century case law – and is distinct from the test set out in the Mental Capacity Act 2005, which relates to lifetime decisions. To satisfy the Banks v Goodfellow test, the testator must:

  • Understand of the nature and effect of making a will;
  • Understand the extent of his or her property; and
  • Be able to comprehend and appreciate claims that others might have on their estate.

The recent decision of James v James confirms that the Banks v Goodfellow test is the sole test for testamentary capacity, providing clarity for all legacy professionals in this key area of the law.

You can read more about the case in our case summary here.

GDPR – top tips for legacy professionals

After months of preparation and guidance, the General Data Protection Regulation (GDPR) finally came into force on 25 May 2018. The comprehensive framework applies across the EU, and increases the obligations surrounding how organisations handle personal data. The UK’s data protection legislation, the Data Protection Act 2018, which supplements the GDPR and will be the legislative mechanism through which the GDPR will be enforced post-Brexit, is also now in force.

Personal data is information that relates to an identified or identifiable individual. It only applies to living people, meaning that data related to a testator is not relevant for the purposes of GDPR. However, there are various scenarios where legacy professionals will likely deal with relevant personal data, including that related to executors and beneficiaries. To assist charity legacy professionals, we have produced a short summary of what they will need to be aware of, and what they ought to proactively address in order to comply with the GDPR.

For more general information on GDPR, see our GDPR factsheet (exclusively available to ILM members), as well as helpful guidance from the ICO here.

Finally, those of you who did make it to the ILM’s conference in May will remember puppy Melvyn, who was instrumental in alleviating some of the usual dryness of the GDPR session. Melvyn has since been spotted out and about, here shown with Leticia at BWB’s away-day earlier this month.

This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of June 28, 2018.