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13th September 2014

Estates and Estate Preservation Trusts - The Cost of Using a Solicitor?

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When considering the cost of using a Solicitor (trained, regulated and insured), it is worth considering the price of using a “lawyer” (unregulated and no training or insurance requirements).

When considering the cost of using a Solicitor (trained, regulated and insured), it is worth considering the price of using a “lawyer” (unregulated and no training or insurance requirements). Two recent cases illustrate the risks. A director of Heritage Legal and Financial Ltd, a wills, probate and inheritance services company, has been jailed for stealing almost £1m over a five year period. Some of the money had been intended as gifts to charity under the Estates he was administering. The prosecutor pointed out that the business of “will writing“ is not subject to regulation, unlike if the Will had been drawn up by a solicitor (the company was formerly “Norfolk Will Writers”). The Judge then confirmed that although the thefts were a breach of trust, it was not as high a breach as if he had been a solicitor. The case was reported in the North Norfolk News. Although not being a solicitor is indeed a mitigating factor to reduce the jail term, it is questionable whether the customers of that business realised that the same high regulatory standards which apply to solicitors do not apply to other “legal” businesses, or would have been happy to know that as a consequence any wrongdoing may be less severely punished. Just as disturbing is the fact that the thefts were only discovered after the director had been jailed for downloading indecent images of children. One wonders whether they would otherwise ever have been discovered. In Nottinghamshire a company called “Goldstar Law” has been closed down by the government’s Insolvency Service. It visited customers at their homes and sold schemes that claimed to protect their assets through wills, trusts and lasting powers of attorney. The Insolvency Service had two concerns. One was that the company had received £400,000 in fees from 132 customers, but had finalised less than two dozen documents. The other was that the “estate preservation trust” they offered showed a “lack of commercial probity”. It was sold as enabling customers to protect assets against care home fees, but the scheme is widely regarded as highly risky and even ineffective if challenged by local authorities. Goldstar had not informed customers of this risk. It’s notable that in both cases the companies used the terms ”legal” and “law” in their names. The use of such terms could mislead their customers into thinking they are clients of a firm of solicitors, with all the protection that involves. Sadly for those customers there is no law to prevent the use of such terms by companies of non-solicitors. Our advice is always to check whether the person advising you is a Solicitor as opposed to a a “lawyer” or “trust advisor”. For Wills, Estates, Lasting Powers of Attorney or Trusts look for the additional qualification TEP (member of the Society of Trust and Estate Practitioners) and remember that it is quite different from calling oneself a ”trust and estates practitioner”. If you would like advice on any of these matters please see our Guidance Notes on Wills, Lasting Powers of Attorney, Estates or Trusts. Or contact Carolyn Bagley on 01604 233233 or click here to email Carolyn.