Position statements on key issues
Probate fees update – July 2017
Earlier this year, the Ministry of Justice put forward a proposal to change the way in which probate fees are charged.
As you may remember, the Institute of Legacy Management strongly objected on behalf of members to the proposal at the time. These proposals were put on hold after the announcement of the General Election in May (see article below).
It has recently come to our attention that the proposal remains dormant and could be reactivated at any time. We want to ensure that MPs and Lords understand the full implications of these proposals so have brought together a consortium of interested parties to sign a joint letter which was sent to MPs earlier this week and has subsequently been picked up by several publications:
The Times (registration required)
The Times – the Brief
Today’s Wills and Probate
Law Society Gazette
We are grateful to the following partners and organisations who were co-signatories to the letter:
- John Barrett, Chief Executive, Small Charities Coalition
- Angela Bowman, Partner and Head of Legacies, Freeths Solicitors
- Jonathan Eshkeri, Director, E&G Solicitors in Spain
- Henry Frydenson MBE, Chairman, ACTAPS – The Association of Contentious Trust and Probate Specialists
- Lucy Gill, Partner, Foot Anstey LLP
- Daniel P Harris, Partner, Stone King LLP
- George Hodgson, Chief Executive, STEP
- Ashley Rowthorn, Managing Director Legacy Link
- Alison Talbot, Head of Charities, Penningtons Manches
- Andrew O’Brien, Head of Policy and Engagement, Charities Finance Group
- Peter Jeffreys, Partner, Wilsons Solicitors LLP
- Richard Bray, Vice-Chairman, Charity Tax Group
We are very pleased with the level of coverage we have been able to achieve, and hope this will help to influence the decision of MPs and Peers should the proposals ever be voted upon.
We will of course keep our members updated with any developments.
Ministry of Justice scraps plans to increase probate fees
Responding to reports this morning (April 21st) that the Ministry of Justice will no longer press ahead with proposed increases in probate fees, the ILM has released the following statement:
“We welcome this news. Had the proposed changes come into effect next month, as planned, the income charities receive from legacies would have decreased by an estimated £18 million per year.
“Our members – along with donors, executors, solicitors and charities – were overwhelmingly against the proposals. We now seek reassurance from the Ministry of Justice that the proposals are scrapped for good, and not simply put on hold in the lead-up to the General Election.”
Ilott v Mitson – Supreme Court verdict
We are pleased by the Supreme Court’s decision in the case of Ilott v Mitson which provides welcome reassurance – save in specific and limited circumstances – that donors are free to benefit whom they wish in their will and that those final wishes will be respected.
This ruling has brought clarity after years of confusion and concern for many in the charity and legal sectors.
Donors can now be more confident that having an up-to-date and professionally written will means their final wishes will be honoured, and our members can continue to fulfil these wishes and ensure every charitable legacy gift achieves its greatest potential.
The value of the legacy management profession
At the ILM we understand that leaving a charitable gift in a will is an extremely important and personal expression of values. Charity legacy professionals are responsible not only for over £2.4bn of charitable income each year, but also for ensuring the bond of trust created with a charity during a donor’s lifetime is honoured after their death. Our members are acutely aware of the fact that they are negotiating a process which coincides with one of the most difficult times in people’s lives – the loss of a loved one. They perform this delicate role, which is essential to the survival of many charitable organisations, with passion and commitment, carefully negotiating the dual responsibility of fulfilling the donors’ final wishes and working to the stringent legal and regulatory framework that governs our profession.
The growing importance of legacy income
Legacy income forms the cornerstone of funding for many UK charities. Without it, they simply couldn’t provide the vital services so many people rely on.
Legacy income has grown on average by 5.1% per annum since 1988 according to Legacy Foresight. As a result, legacy professionals are currently responsible for the administration of over £2.4 billion of charitable legacy income each year. Legacy gifts are projected to contribute £13.3 billion to the charity sector over the next five years, and the ageing of the baby-boomer generation, and the resulting rise in death rates over the next twenty years, suggest this figure will continue to grow. But the baby-boomers expect a great deal from the organisations they choose to support. They are savvy, informed consumers, raised on marketing and brands. They arrange their affairs with care and consideration, and are likely to make more than one visit to their solicitors to amend their wills. When they do decide to make a charitable gift, they are likely to place greater restrictions on those gifts, and give more specific instructions for their administration and use, than our sector has been accustomed to dealing with. Legacy professionals need to be ready to respond to these emerging demands, in order to protect and build trust in the organisations they work for.
By placing an increased focus on personalisation in legacy management, and by improving our non-technical training, the ILM will be in a great position to assist our members in supporting this new generation of legacy donors.
Good practice and regulation in legacy management
The ILM has actively contributed to discussions about the regulation of fundraising in the charity sector, while welcoming the new Fundraising Regulator’s decision that legacy administration will sit outside its remit when direct marketing is not used to solicit legacies. We will continue to ensure the voice of legacy professionals is heard in these spaces, and look forward to working closely with the Fundraising Regulator to review the Code of Fundraising Practice in relation to legacy fundraising.
We are also currently exploring the creation of good practice guidance for legacy professionals, shaping and articulating the values and standards our members take pride in working to. This guidance, which will hold considerable value in helping us address the wider issues affecting our sector, will be formed through a collaborative process with our members, and will allow us to carve out an ambitious vision for ourselves as a professional body with much to offer.
The working relationship between charities and solicitors
Solicitors are key partners and influencers in the realisation of charitable legacy gifts, so the ILM is concerned at suggestions of a lack of trust between solicitors and charity legacy professionals. Whether this is real or perceived, the long-term impact of any weakness in this crucial relationship demands attention and action.
At the ILM we believe those leaving legacy gifts deserve the very best from us all, and we are focused on fostering and improving collaboration and understanding, acting in many ways as a bridge between the professional groups.
Direct communication, open discussion and shared learning provide the antidote to real or perceived issues here, and the ILM will continue to work hard to protect our shared capacity to ensure that every donor’s charitable legacy achieves its greatest potential.