Professor Lesley King
Solicitors are often anxious about the circumstances in which it is permissible to draft a will for a family member which benefits the solicitor. The recent decision of Franks v Sinclair [2006] EWHC 3665 contains some useful guidance.
The facts
Mrs Franks had made several wills over a period of years leaving little or nothing to her son, a solicitor, with whom she was not on good terms. A will made in 1992 left the residue to her daughter’s son, Jonathan, with whom she had a close and warm relationship.
The son claimed that in 1994 his mother asked him to prepare a will removing all benefits from her granddaughter who had “behaved badly over a loan” and leaving the residue equally to him and his sister instead of to Jonathan. He did not ask his mother for an explanation simply assuming that she had argued with Jonathan. He, himself, had not been on speaking terms with Jonathan for some years.
When the will was prepared Mr Franks went to his mother’s house with two members of his firm to act as witnesses. He read the will out to his mother; the residuary gift did not refer to the beneficiaries by name. It left the residue equally to her two children with a substitutional gift to the grandchildren.
Mr Franks took the original will back to the office and did not leave Mrs Franks a copy. He subsequently destroyed the notes of the meeting.
Mrs Franks appears to have remained on good terms with Jonathan and a few months later signed an enduring power of attorney in his favour. When Mrs Franks died in 2004 Jonathan challenged the will.
Where the circumstances in which a will is executed are such as to excite the suspicion of the court, the burden of proof lies on those seeking to prove the will to establish affirmatively, on the balance of probabilities, that the testator had known and approved the contents of the will. In this case, serious suspicion was aroused as to whether the testatrix had known and approved the contents of the will in question.
At first sight a will leaving the residue to be divided equally between the testator’s two children would appear uncontroversial. However as David Richards J said:
“the particular circumstances of this case are not the same as the run of the mill case where a testatrix wishes to leave the bulk of her estate equally among her children and does not give serious consideration to alternative provisions. The main change to the will favoured Mr Franks, who had been excluded from the 1992 will, to the detriment of Jonathan with whom he was not on speaking terms. Mr Franks failed to take elementary precautions, such as keeping a note of his mother's instructions, leaving her with a copy of the draft or the executed will to consider at her leisure, taking her through the will and explaining its provisions in everyday language and ensuring that she received independent and impartial advice. The particular circumstances of this case raise a significant degree of suspicion and the court must carefully scrutinise the evidence……”
Mr Franks placed reliance on the fact that he had read the will out to his mother, word for word, and, hence, given her the opportunity to hear the terms of the will and raise objections to it. The judge said that the substitution clause was “expressed in the customary technical language of wills, which most lay people will find impenetrable and many may consider to be gobbledegook”
The clause was in the following terms:
“I give devise and bequeath all the remainder of my property whatsoever and wheresoever both real and personal not hereby or otherwise disposed of by me unto my Trustees upon trust to sell call in and convert into money all such parts of the same as shall not consist of money but so that my Trustees shall have full power to postpone such sale calling in and conversion for so long as they shall in their absolute discretion think fit without being liable for loss and after payment thereout of my debts funeral and testamentary expenses to stand possessed of the same (hereinafter called “my residuary estate”) UPON TRUST for such of them my child or children as shall be living at my death and if more than one in equal shares absolutely PROVIDED THAT if any such child or children of mine shall predecease me leaving issue living at my death and who attain the age of eighteen years such issue shall take and if more than one equally the share of my residuary estate which such child or children of mine would have taken had he she or they survived me “
.…..I think it very unlikely that Mrs Franks understood the effect of clause 8 just as a result of it being read out loud to her.”
In the judge’s opinion had Mr Franks’ intention really been to ensure that his mother understood the terms of the will, it would have been more “easily and more obviously accomplished by an explanation of the provisions in terms which Mrs Franks could clearly understand…..In my judgment, the reading of the will cannot be relied on as establishing Mrs Franks' knowledge and approval of its terms.”
The judge said that the particular circumstances clearly required Mrs Franks to receive independent advice. One of the duties of a solicitor, even if he is the son of the testator, is to discuss and, if appropriate, question the proposed terms of the will, in order that the testator reaches a fully informed decision. Mr Franks was incapable of impartial discussion of his mother's instructions. Not only was he to become a principal beneficiary in place of Jonathan, but he was not on speaking terms with Jonathan.
The judge drew adverse inferences from the failure to keep any note of the instructions.
Law Society Rules and Guidance
Solicitors’ Practice (Conflict) Amendment Rule 2004 introduces a new16D on conflicts into Solicitors’ Practice Rules 1990. Para 5 Para 5 says:
“Where a client proposes to make a lifetime gift or a gift on death to, or for the benefit of:
(a) you;
(b) any proprietor or employee of the practice; or
(c) a family member of any of the above
and the gift is of a significant amount, in itself or having regard to the size of the client’s estate and the reasonable expectations of the prospective beneficiaries, you must advise the client to take independent advice about the gift, unless the client is a member of the beneficiary’s family. If the client refuses, you must stop acting for the client in relation to the gift.”
The guidance to the Rule says:
“Accepting gifts from clients
56. This issue is covered in 16D(5) and reflects the fiduciary nature of the relationship between you and your client. It is a situation where public perception is important and reflects the profession’s image. The rule does not prevent you accepting a client’s gift but does require the client to take independent advice where the gift is significant, or significant as compared with the client’s likely estate and the reasonable expectations of prospective beneficiaries.
57. This rule allows you to prepare a will for a family member under which you receive a significant gift without requiring the client to seek independent advice on that gift. Extreme caution, however, should always be exercised when you are asked to prepare a will for a member of your family under which you are to benefit as your ability to give independent, dispassionate
advice could easily be undermined by your relationship with others within, and outside, the family. The risk of conflict, therefore, is very high. If you are to receive a significant gift from the estate you need also to consider the reasonable expectations of the other prospective beneficiaries, who are likely to be your relatives. If, having taken these "reasonable expectations" into account, it appears that you are to receive a benefit which is in any way disproportionately large you should always ensure that the client is separately advised on that gift. "Prospective beneficiaries" in the context of this rule means others who would be reasonably expected to benefit because of their relationship to the testator and their "reasonable expectations" would be dependent on the closeness of that relationship. An objective test would be applied in the event of a complaint.
58. There are other factors which should be taken into account when preparing a will for a family member under which you benefit. It may also be far easier for a close family member to talk through their proposals for their will with someone who has no personal interest in its contents and who is unlikely to be offended by any suggestions they might wish to make. Finally, your relative's bequests are secure from allegations of undue influence if their will is drawn by someone totally independent and who does not take a benefit from it. Family member is not defined in the rule to allow a flexible approach to be taken. Co-habitants are not included in the exception to independent advice because their legal position is less secure than those related by blood or marriage.
59. What is a “significant amount” for the purposes of this rule cannot be quantified because the particular circumstances of the proposed gift must be taken into account. In general, however, anything more than a token gift will be considered significant. If, therefore, anything more than a token amount is accepted without the client having separate advice you may be exposed to legal challenge and allegations of misconduct.
60. When considering whether a gift is of “a significant amount” the date of preparation of the document is relevant when determining the size of the estate.
61. If more than one gift is made to members of a firm, for example, £1,000 to each of the partners in the firm, they should be amalgamated for the purpose of establishing whether the gift is “significant”.
62. The implications of 16D(5) need to be made clear to all members of your firm who take instructions from clients, whether solicitors or not. Supervision is important to ensure compliance.
63. Where you are given money or property to distribute for the benefit of others, such as in a secret trust, this is not considered to be a “gift” for the purposes of 16D(5). However, care should be taken to ensure that records are kept confirming the arrangement and to ensure that the transaction is not one which could contain a potential for money laundering.
The Moral
Do not prepare a will for a family member if it gives you a disproportionate benefit.
More generally, always preserve your notes in case of dispute and give a clear explanation of the meaning of complex clauses which will not be readily comprehensible to a lay person.
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