Ethical Will Writing: Balancing client wishes with legal realities

Alongside the need for legal compliance, advisers must also meet ethical considerations when drafting a will. This includes navigating complex family dynamics, as well as honouring client wishes and managing their expectations.

This tricky balancing act of satisfying both legislative demands and those of the client can present a challenge for advisers, particularly when there’s conflict between what’s best for legal compliance and what the client feels is best for their family circumstances at the time of drafting.

“Family dynamics are increasingly complex, which means the ‘fixed interest’ approach to drafting wills is a dinosaur,” says CTT’s Technical Director, Spencer Tattam. “Leaving assets that will go to the client’s beneficiaries no matter what the circumstances are at the time of death is a thing of the past.”

He points out that: “Most often, a client’s estate will end up where they want it to go – but there is always that ‘what if…’ to consider. What if they have a falling out with their son? What if their daughter goes through a divorce…? What will happen to their estate then?”

Futureproof flexibility

There are numerous factors that can compromise a client’s estate and wishes when the time comes to execute their will. To avoid the uncertainties of drafting a will that may prove unfit for purpose in decades to come, CTT specialises in creating trusts that are both legally compliant and offer executors greater flexibility during probate.

These trusts are designed to allow the testator to appoint trustees, whom they believe will make the best decisions regarding the assets placed in trust when the time comes to execute the will. By appointing professional trustees such as CTT, clients can also be assured their executors’ decisions will be neutral and unaffected by grief or family politics.

“How we approach estate planning and how we apply the trusts we use is different from everybody else,” Spencer explains. 

“I can’t possibly know what’s going to be the best will for you when you die; I can draft you a will that reflects your wishes right now, but it might not necessarily be the will you want in 50 or even 15 years’ time, because circumstances change. So, we create trusts that are not only tax-efficient but also flexible. We can tailor it to the client’s current wishes but also build in this flexible approach to avoid future threats as far as is possible.”

To the letter?

With a will such as this, the trust or trusts are accompanied by a non-binding letter from the testator outlining their wishes to the trustees. This document, which is signed by the testator, allows them to stipulate their preferences for the distribution of assets placed in trust at the time of writing, but it also allows the trustees to use their best judgement when the time comes to execute the will.

Spencer goes on to explain that, although the testator’s wishes will always be paramount, there are circumstances where trustees might rightly decide to depart from the word of the letter.

“I experienced a classic example of this when I was head of CTT’s Probate Team,” Spencer recalls. “I had a phone call from a solicitor who was representing a lady going through a divorce. She said she understood we were executors for her client’s late mother-in-law, and that the deceased’s son was a likely beneficiary of the estate. She wanted to know what he had received from the trust as it might contribute to his share of the divorce settlement. We hadn’t gone through probate yet, so I was able to tell her with confidence that he had received nothing from his mother’s estate.”

“A letter followed a few weeks later from the same solicitor asking us to now confirm what the son had received from the trust. We were able to tell her that, as he was going through a divorce, we as trustees had decided to hold back on giving the son any capital from the trust on the basis that half of it would end up going down an avenue the deceased did not expect. So, we benefitted his siblings, and once the son’s divorce was complete, we were able to find in his favour and in doing so saved him 50% of his inheritance.”

Finding the balance

Some of the most complex and difficult client requests often come when there are multiple children who stand to benefit, but the client decides that one or more children is to receive nothing from their estate.

“The will becomes a public document when the client passes away, which can rub salt into the wounds for any beneficiaries who’ve specifically been excluded,” Spencer says.  “In our experience, it’s best to tell the client exactly what they need to do if they want to exclude a child from their will.”

The Inheritance (Provision for Family and Dependants) Act 1975 is one of the biggest legal obstacles preventing testators from successfully excluding a child from their will. It stipulates that children – even adult children – have priority rights on their parents’ estates, second only to the deceased’s spouse.

“If a client wants to disinherit their child, they need to reason why they’ve done it in their letter of wishes; simply excluding them in the will is not enough,” Spencer explains.

He cites the landmark case of Ilott v Mitson in which an estranged daughter, who’d had no communication with her late mother for nearly 40 years, sought a claim against her estate – and won. The claim was successful, despite the mother expressly cutting her only child out of her will in favour of leaving her estate to several named charities.

“Even though the testator wrote a letter of wishes outlining all the reasons why she didn’t want her daughter to get anything, there was no evidence that the mother had any prior relationship with the charities she’d chosen as beneficiaries,” Spencer explains. “It seemed out of character, and so, the daughter walked away with £50,000 of her mother’s estate.”

He iterates that, in these circumstances, some responsibility lies with the adviser to ensure the client uses their letter of wishes to not only explain why they want to exclude someone from the will, but also why their chosen beneficiaries are inheriting.

“We’d also advise clients to keep all documents and letters to trustees under lock and key and to be very careful where copies go; this avoids inviting any outside opinions or challenges during the client’s lifetime on where their assets should go when they die,” he says.

This can also prevent Proprietary Estoppel, where an individual acts to their detriment during the testator’s lifetime under the assumption they will benefit from a property or land when the testator dies – and then uses their reliance on the assumption and subsequent diminished circumstances to lay claim to the property or land following the testator’s death.

Protecting yourself and your client

Understanding ethical practice around taking instruction is also important to protect both client and adviser in the event of a Larke v Nugus. “If another practitioner writes to you with a Larke v Nugus request you have to produce your whole will file and answer detailed questions about your relationship with the client and your instruction taking for their will,” Spencer explains.

“We help our member advisers capture this data at source with Legacy Software’s Will Clarity Statement. It covers all Larke v Nugus answers and some additional information as well, particularly the reasons for excluding or including certain beneficiaries. It’s also signed by the client – most likely, a Will Clarity Statement would have prevented a lot of the Ilott v Mitson problems,” he says.

Another potential grey area for practitioners is during execution where challenges can arise around the signing of the will. For this, CTT provides its members with an Execution Statement which captures information around the documents being executed.

“Our Will Clarity Statement and Execution Statement are designed to protect the instruction taker, but also the wishes and the legacy of the client,” Spencer says. “They ensure the level of due diligence is the same for every client, no matter the value of the estate, and that the end beneficiaries get what the testator intended, even if the will is challenged; that’s our job as advisers.”

The Will Clarity Statement and Execution Statement are also invaluable tools for protecting both client and adviser in the event the will should ever be contested on the grounds of coercion.

“Coercion and fraudulent calumny can be tricky to detect,” Spencer says. He suggests the process of taking instructions for a client’s will should involve a discussion around the content and nature of any previous wills and for advisers to be vigilant of changes that seem inconsistent or out of character.

“Any sudden and significant departures from previous wills can be a sign of coercion, particularly if the departure seems unnatural or strange such as leaving everything to a ‘new’ partner as opposed to children, or giving everything to just one child when they have multiple children,” he points out.

“If there is any doubt regarding the capacity of the client then a mental capacity assessment should be sought. This is the best way to ensure the legacy of the client is as safe as it can be.”

“Ideally, instructions should always be taken with just the client present, and at least confirmed with nobody else present. Any significant or unusual changes or client dispositions should be justified by the client in a letter that’s stored with their will and recorded by the adviser in the Will Clarity Statement,” Spencer concludes.

The takeaway

Protecting and upholding the client’s wishes and ensuring all documents are legally compliant are among the key responsibilities for advisers when taking client instruction. CTT provides various drafting and training tools, such as Legacy Software, as well as legal products including bespoke trusts, to help guide advisers through the will writing process and ensure your drafting is current, compliant, and flexible. For more, contact the team at CTT Legal.