Current Issues in Trusts and Probate

 In Probate, Trusts

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trusts and probate issues

Ten Old Square is delighted to have been asked to provide regular contributions to this excellent web site. Over the forthcoming months we will be posting articles on a range of topics, including lasting powers of attorney, costs in contentious probate, insolvent estates and sham trusts. In our first article, Richard Dew, asks what are the current issues facing the trusts and probate practitioner.

These are interesting and difficult times, whatever field you work in. It is impossible to avoid opening a newspaper, still less a legal periodical, without reading of falls in house prices, reduced business for all service providers and, worst of all, redundancies and lay-offs. No one doubts that these issues affect the practitioner in trusts and probate just as much as those advising bankers and commercial firms. The question posed by this article is how precisely this will affect the practitioner in trusts and probate.

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The first answer may be; not as much as other practitioners. If death and taxes are the only certainties in life what better field to work in than in dealing with the consequences of people’s deaths and avoiding their estates from paying taxes! Almost certainly, though, this is an overly blasé attitude to take and one that does not address the likely realities of practice for the next year or two. People will continue to die but their estates will be smaller, particularly as house prices fall, and that will make tax avoidance much less of an issue. That in turn will make instructions for lifetime estate planning (particularly after transferable NRBs) harder to come by. Similarly, those contentious claims regarding the disputed Wills or the 1975 Act claim will become less viable if the assets in the estates are smaller and even if brought will be less lucrative.

The second answer is that the issues facing probate practitioners will certainly change, perhaps in a way that many of us are not used to. Three examples can be given. First, as personal and corporate insolvencies rise so too will the number of insolvent estates. As the case of Re Vos [2005] WTLR 1619 [2006] BPIR 348 showed many of us are not prepared for the risks presented by such estates. Neither, perhaps, have we recognised the opportunities, including that such estates can, in many cases, be administered by the probate practitioner and not by the insolvency practitioner.

Second, falling house prices have changed the dynamics of contested probate. In days gone past all were content to await the outcome whilst the principal asset rose in value.

Now, the beneficiaries are not content to allow the applicant (often a widow/er or cohabitant) to occupy the house whilst it, and so the estate’s value falls. This puts an imperative upon resolving the claim early, often through ADR, but where that is not possible we will increasingly be asked to explore the possibility of obtaining possession before trial. And what of the resolution of the claim? How many beneficiaries will now agree to long term life interests?

Third, trusts and probate practitioners will increasingly come across beneficiaries, perhaps struggling financially, who will be interested in challenging trusts or arrangements made before death in order to get to the pot of gold hidden within those trusts. That will make claims to challenge those trusts, perhaps in whatever manner possible, very common, in turn putting pressure on the trustees and their advisers themselves.

As times get tougher we will all need to be ready to deal with these changing issues and do so before colleagues in other areas, including the insolvency and commercial fields, seize upon them to make up for falls in their own work. We should all, therefore, welcome the launch of this website which will, in the months ahead, add significantly to the learning on those topics.

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