Executry and Trust Accounting
In view of correspondence received following publication
of this Guidance, the whole matter will be reviewed again by the
Professional Practice (Rules & Waivers) sub-committee. In
the meantime this Guidance is suspended and there is no requirement
to follow it from the date of its issue until further
notice.
Following consideration of the propriety of a solicitor seeking
discharges from beneficiaries in relation to their administration
of an Executry or a Trust the Professional Practice (Rules &
Waivers) sub-committee has approved the following Guidance.
It is entirely appropriate and prudent for an Executor or
Trustee and their solicitor to send a final accounting to
beneficiaries setting out the extent of the beneficiaries' interest
and to seek approval of such accounting by the beneficiaries before
embarking on a final distribution and settlement.
It is inappropriate however to go beyond an approval of the
accounting and require such beneficiaries to (1) approve the whole
actings of the Executor/Trustee and their solicitor; (2) discharge
the Executor/Trustee and their solicitor from all claims competent
to the beneficiaries against the Executor/Trustee and their
solicitor; and (3) require that the beneficiaries free and relieve
the Executor/Trustee and their solicitor from and against all
claims and demands which could be made against them in connection
with their intromissions with the Estate/Trust.
Once an Executor/Trustee completes the administration of an
Executry/Trust their powers and duties automatically terminate. If
however there remains Estate to be administered or Trust purposes
to be fulfilled their powers and duties continue and it is not
appropriate that these are prematurely discharged. Nor is it
appropriate that the beneficiaries indemnify the Executor/Trustee
or their solicitor against any negligent administration.
Such approvals, discharges and indemnifications will relate to
duties and functions about which the beneficiaries are unlikely to
have any detailed knowledge or understanding.
If the solicitors have not acted for the beneficiaries,
applications for such approvals, discharges and indemnifications
would require a written warning under Rule B2.1.7. Even if it is
recommended to such beneficiaries that they obtain independent
legal advice regarding the request for such approvals, discharges
and indemnifications it is inappropriate to expect beneficiaries to
incur the additional expense of obtaining such independent legal
advice to ensure that they are properly informed before
signing.
To delay making settlement to a beneficiary pending receipt of
such an approval, discharge or indemnification may well render the
solicitor vulnerable to a complaint of inadequate professional
service.
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