Practitioners warn banks against releasing large sums before grant of probate
Monday, 15 June, 2020
Solicitors for the Elderly (SFE) has warned that some financial institutions are releasing as much as GBP125,000 from estates to a deceased's relatives without requiring a grant of probate.
SFE's Chairman Michael Culver TEP says that, in recent years, the cash limit has risen steadily from the traditional GBP10,000, under pressure from bereaved families dealing with the delays and expense of probate. In 2017, UK Finance (formerly the British Bankers Association) and the Building Societies Association agreed a code of conduct on the treatment of deceased clients' estates, including the release of necessary payments before probate. However, no definite standard limit was established, and different institutions still operate different practices.
The Building Societies Association told the Daily Mail's This is Money supplement that its members usually set a GBP15,000 limit for paying out funds without probate, although it admitted that the maximum amount ranges between GBP5,000 and GBP30,000, and depends on the merits of each case.
However, banks and building societies have reviewed their bereavement processes since the coronavirus lockdown began, because the usual approach of a face-to-face discussion with a bereaved relative is not easily done at present. Some have raised the probate limits in certain circumstances, said the Building Societies Association.
Culver says this opens the system to abuse by people falsely claiming to be an executor or administrator, perhaps by producing an out-of-date will that has since been superseded. SFE is now lobbying banks and building societies to create a universal policy on limits for releasing bank accounts after death, to prevent abuse, fraud and inheritance tax disputes that might arise if cash is wrongly distributed. 'If there isn't transparency around the value of money released then the declaration of estate size [to HMRC] could be inaccurate; and it could also seriously impact lawyers' work to carry out the deceased's wishes,’ Culver commented.
Information supplied by (STEP) 15.06.20.
England and Wales Court of Appeal grants beneficiary a second chance to prove trustees' breach of trust
Monday, 8 June, 2020
The England and Wales Court of Appeal (EWCA) has overturned a 2019 England and Wales High Court (EWHC) ruling, in which a trust beneficiary's claim for breach of trust against the trustees was summarily struck out.
The claim was brought against the Swissindependent trustee corporation by Robert Sofer, the beneficiary of a family trust set up in the Australian state of Victoria but governed by English law. Sofer sought recovery of large sums paid by the trustee to the settlor, his father, during his father’s lifetime. The payments, amounting to USD19.2 million in all, were recorded as loans to the settlor, but Sofer is challenging their validity, claiming they were gifts made in breach of the prohibition in the trust deed. He seeks a declaration to that effect, together with orders that the trustee should reinstate the trust funds and be removed as trustee.
The trustee is attempting to avoid liability by relying upon deeds of indemnity signed by the beneficiaries, including Sofer. The trustee exoneration clause provides a complete defence to the claim where the particulars contain no properly pleaded allegation of dishonest breach of trust. According to the trustee, this condition is satisfied here, with Sofer not claiming that the trustee benefited in any way from the breach of trust he alleges. He does allege, however, that the trustee knew that it was acting wrongly when making the payments and never believed that they were loans.
To overcome the exoneration clause, Sofer thus had to make an explicit allegation of dishonest behaviour by the trustee, and to support it with evidence. Last year, after the trustee applied for summary dismissal of his claim, Sofer provided two witness statements in evidence, based upon his personal knowledge and certain documents. However, at a hearing in the EWHC, Matthews HHJ decided he had failed to produce sufficient evidence for this, and dismissed the case.
Sofer appealed, and three EWCA judges have now agreed with him that Matthews should not have rejected Sofer's case so abruptly. Matthews, they said, had been wrong to treat the hearsay evidence given by the trustee's witnesses as conclusive, despite its conflict with Sofer's own evidence. Sofer was entitled to test the trustee's evidence by the normal processes of disclosure and cross-examination, they said.
Moreover, Matthews was also wrong to say that it was a shared assumption that the trustees' payments to the settlor were loans. In fact, that was simply something that the trustee had told Sofer in the context of the indemnity agreement. Sofer contended that the trustee had made that representation falsely, and so it could not be described as a shared assumption. He contended that, when signing the deeds of indemnity, he did not know that the so-called loans were in fact gifts, and so he had not waived his claim against the trustee because he did not know what he was doing.
These considerations led the EWCA to rule that Sofer would have a real prospect of success in a full hearing. Accordingly, it allowed his appeal so that his claim can proceed again in the EWHC (Sofer v Swissindependent Trustees, 2020 EWCA Civ 699).
Information supplied by (STEP) 8th June, 2020.
PROBATE: HMCTS will no longer accept old application forms
New Grant of Representation Application Forms for Professionals Further to my letter of 19th March advising of the launch of new standard application forms for professional-practitioners, we have received some valuable feedback in respect of the transitional arrangements. Having considered your feedback we have reviewed these arrangements in light of the current unprecedented situation regarding COVID-19 and have extended the transition period from 4 weeks to 8 weeks. This is to enable practitioners sufficient time to progress any inflight cases that you have already been working on. We would advise that any new work which is undertaken should now be completed by either using the new paper application forms (electronic signatures including typed signatures will be accepted) or applying online. HMCTS is actively encouraging the use of online applications as this enables us to maintain the service whilst many of our staff are also remote working. Some of the feedback received questioned why we are introducing the new forms when everyone in the system is under so much pressure. The overriding reason is to enable us to utilise our bulk scanning service which digitises the paper applications and allows us to work remotely. This will help ensure your clients still receive their grants during this significant disruption to our normal business. The revised timeline for the introduction of the new forms The forms were introduced on 23rd March 2020 The time that the Probate Registries will be permitted to accept the old-style Statements of Truth, will be 8 weeks (extended from the previous 4 weeks suggested) After the 8-week period (after 18th May 2020), if any applications with separate Statements of Truth are received they will be returned requesting the appropriate new combined form. You can apply online We would like to take this opportunity again to confirm that the digital process can support the remote working that is currently taking place, if you want to apply for a grant of representation or caveat online, please visit: https://www.gov.uk/guidance/hmcts-online-services-for-legal-professionals Further information We are currently considering other elements of our practices to see if any interim measures can be introduced to help you continue to operate during this pandemic and I hope to be able to share more news over the coming days. If you would like further information about our work or have any further feedback on the forms, please email
Information supplied by HMCTS 1st June, 2020.