Wills & Probate. Just for you. In Brief. Executors Rights to Renumeration

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1 April 2012 Wills & Probate B U L L E T I N Just for you In Brief MEET THE TEAM Welcome to the fifth issue of our Wills and Probate Bulletin. The bulletin aims to bring you news and information on Wills, Probate and Curatorship matters and details of the team s recent and forthcoming events. Executors rights to remuneration... more > What is your last wish?... more > Wills for Jersey shareholders... more > Probate fees increase... more > Registration of LPAs and EPAs in Jersey... more > Love in the air at Mont à l Abbé school... more > Nigel Pearmain Partner T: +44 (0) E: nigelpearmain@voisinlaw.com Executors Rights to Renumeration The right of an Executor to: (a) payment of costs in the administration of an estate; and (b) to remuneration when an estate is insolvent A recent Judgment in The Royal Court of Jersey has outlined and summarised the position regarding the payment of legal fees by an Executor, both in case of solvent and insolvent estates. In Re Moralee 2012, the deceased made a Will appointing an English firm of solicitors as his Executors and Trustees and included a charging clause in his Will for them to charge their reasonable and proper charges in connection with the administration of the estate or the trusts thereof. In his Will, the deceased left a legacy to his former partner and the residue to his four children, three of whom were children by a former marriage and the fourth was a child from his former partner. The deceased also left a widow who was not included in the Will but who claimed her legitime so that the Will was reduced ad legitimum modum. Anne Hembry Manager - Probate & Estates T: +44 (0) E: annehembry@voisinlaw.com Janina Porter English Solicitor - Probate & Estates T: +44 (0) E: janinaporter@voisinlaw.com After the death of the deceased, Viberts law firm was instructed to act for the widow, and Collas Crill were instructed to act on behalf of the four children. The Executor named in the Will (the English firm of solicitors) renounced Probate and a partner in another firm of lawyers in Jersey was appointed Executor Dative two years after the date of death of the deceased. The Executor Dative brought a Representation to The Royal Court of Jersey for directions on whether the legal fees incurred by Viberts and Collas Crill should be considered to be debts of the estate or personal liabilities of the widow and children respectively. The estate affairs were complex and, in October 2011, the Executor Dative established that the estate was probably insolvent. He therefore sought directions from The Royal Court as to how to proceed. Jean de Carteret Secretary T: +44 (0) E: jeandecarteret@voisinlaw.com

2 The Court separated the various potential liabilities of the estate into three categories:- 1. The debts due by the deceased as at the date of his death; 2. The costs and expenses incurred by the Executor Dative in the course of his duties in relation to the estate ( costs of administration ); and 3. The professional charges of the Executor Dative ( Executor s remuneration ). Costs of administration: It was agreed that the costs of administration included work carried out prior to a Grant being issued, such as placing items in safe custody or preserving the estate, provided that such work is not intermeddling. Any work done for the benefit of the estate would form part of the costs of administration. The difficulty in this case was in determining whether the legal fees of Viberts, acting on behalf of the widow, and Collas Crill, acting on behalf of the children, should form part of the costs of administration. The Court determined that, because of the circumstances of this case, the work carried out by these two law firms prior to the appointment of the Executor Dative was done for the benefit of the estate and did not constitute intermeddling. The Court, however, directed that the legal costs be reviewed to ensure that the estate only reimbursed the legal costs that related to work carried out for the benefit of the estate and not the work carried out for the widow and the children. The Court found that the costs of the Executor and the legal costs incurred by the widow and children are all of equal degree but that the Executor has a right to pay himself in full from the assets in the estate. Under the terms of Article 15 of the Wills and Successions (Jersey) Law 1993 the costs of administration of the movable estate of a deceased person shall be paid out of the gross movable estate unless the deceased person s Will provides otherwise. Reasonable funeral, testamentary and administrative expenses therefore have priority over the preferential debts of the deceased. Executor s remuneration: The Court determined that the Executor s remuneration derives from appropriate authority in the Will and, in the absence of such authority, the Executor must act gratuitously. The Court found that the authority to charge comes from the testator who can give that authority if he has the funds to do so but that such authority cannot be effective against his creditors if the testator s estate is insolvent. The Court also found that a professional Executor cannot charge against the estate in which the creditors alone have an interest in the assets and therefore where an estate is insolvent authority to charge remuneration by an Executor can only be conferred by agreement between the creditors or by directions from the Court. A summary of the Court s findings is as follows: The costs of administration of an estate take priority over all the other claims in an estate; All costs incurred by third parties in the administration, and for the benefit of the estate prior to the Grant being issued, are costs of administration if ratified by the Executor; The Executor has the right to pay himself in full for the costs of administration against creditors of equal degree; The authority in the Will for the Executor to be paid professional remuneration is not effective if the estate is insolvent. In this case the Court stated that if an Executor found that an estate is insolvent they should apply to the Court for directions and convene the creditors to that Hearing as this would reflect the position that the Executor would be administering the estate for the benefit of the creditors. The case outlined that the Court will be mindful of the public interest in having estates competently administered and will not expect professional persons acting properly to provide their services gratuitously. Anne Hembry Voisin Law

3 What is your last wish? Have you ever thought about what happens when you die? Who will make the decisions about your funeral service or cremation? At such a distressing time for the family these decisions place an additional burden upon them when you could have written your wishes down and placed the details with your Will. In a widely reported recent case a lawyer expressed a wish to be buried in the Welsh village where he grew up despite travelling the world extensively and living abroad. The members of his family have honoured that wish and arranged for his body to be brought back to Wales for burial. Many people have specific wishes but unless these are written down then the family will only be making calculated guesses. A letter of wishes concerning your funeral and burial can be placed with your Will and held safely by your lawyer. This can be updated or changed at any time. What about your personal estate such as bank accounts, investments, jewellery and cars? This short list is not exhaustive but have you thought about who should look after your financial affairs and sort everything out after you have gone? Who would you want to be the person(s) most responsible for doing this your spouse, child(ren) or other trusted relative, friend or professional adviser? You need to consider the strain on your family if you appoint them versus the cost of appointing a professional Executor who would be independent. Do you have charities that you support during your lifetime? Many people have one or two favourites that they donate to regularly either because of a particular passion or interest or in memory of a close family member or friend. Have you considered leaving that charity or those charities a sum of money from your estate when you die? All charities need gifts of money (legacies) to help support them financially in continuing their good work. You can leave any sum of money to charity but, of course, you should consider the amount in context of the total value of all your personal estate. Who do you want to receive the balance of your assets after payment of your funeral costs, any debts, and any legacies? Your spouse, your children or grandchildren or other family members, or close friends perhaps even charities? You should be aware that under the current inheritance law in Jersey your family members are entitled to claim a certain share. Have you considered the implications of this? Have you consulted your lawyer if you do NOT want to leave a close family member anything even if they are entitled to a share? If you do not have any close family and have not made a Will then your nearest blood relative would have to be traced to deal with your estate. The cost of doing this may be considerable when you could have made a straightforward Will at a reasonable cost appointing an Executor and leaving all the balance of your assets to charity, for instance. Making a Will sets down your last wishes and bequests and alleviates some of the strain on your family and reduces the cost to your estate. Voisin s Wills and Probate team are happy to have an informal discussion with you about making your Jersey Will. This short article only makes reference to matters concerning a Will of Personal (Movable) Estate and does not cover the position regarding real estate (property) situate in Jersey. Wills for Jersey Shareholders Karen Grieve is a Senior Manager in the Wealth Structuring Group of Voisin s associated firm, Volaw Trust & Corporate Services Limited, who provide fully managed services for Jersey registered companies. In her experience the provision of a Jersey Will to deal with shares in a Jersey company, and thereby its assets, is a must. There are three important questions for shareholders in Jersey companies to consider: Do you own shares in a Jersey company that are not held for you by a trust? Having shares held in a Jersey trust means that the shares remain part of the assets of the trust even upon the death of the shareholder, and are therefore held in trust for the remaining beneficiaries.

4 Are you domiciled outside of Jersey? Shares in a Jersey registered company can of course be dealt with under the terms of a world-wide Will; a Will established in the country of residence or the country of death; and may also, where no Will has been made, be dealt with under the intestacy laws. Each of these scenarios can give rise to additional costs, work and time delays, not to mention the increase in stress associated with dealing with such issues at a time of bereavement. Do you want your family to be spared a lot of bureaucracy when dealing with your affairs after your death? These issues are highlighted in cases where clients have several Wills, some in countries with very different and bureaucratic rules. It is far simpler, cleaner and quicker to have the shares dealt with by a Jersey Will which is specifically drafted to meet the requirements of the local probate division of the Royal Court of Jersey. In a joint approach, Volaw instruct Voisin s probate team to draft such Wills for their clients with shares in Jersey registered companies and to assist the named executor, if required in proving the Will, collecting and distributing the assets during the probate process. Our Wills and Probate team would be very happy to advise on the costs and process of drawing up a Jersey Will. If you would like to discuss how Volaw can help with these matters, please contact Karen Grieve (kgrieve@volaw.com). Have you made a Will yet? Voisin Law firm and the Jersey Citizens Advice Bureau are running a free a Wills Clinic on the last Thursday of each month between 2 pm - 3 pm at the Citizens Advice Bureau, St Paul s Centre, New Street, St Helier. If you are interested in discussing or making a Will then please contact the Jersey Citizens Advice Bureau on to book your place for a twenty minute appointment or for further information. Templar House, Don Road, St Helier, Jersey JE1 1AW, Channel Islands. Tel: +44 (0) Fax: +44 (0) mail@voisinlaw.com

5 Probate Fees Increase To expand on the Increase in Statutory fees, the Finance (2012 Budget) (Jersey) Law 201- came into force on 1st January Visit the Jersey Legal Information Board website for further details: This amended the existing schedules to the Stamp Duty and Fees (Jersey) Law 1998 and resulted in the professional application fee for Probate applications increasing from 60 to 80 (the fee was increased previously from 50 to 60 in January 2011). Registration of LPAs and EPAs in Jersey Where a person has not appointed an Attorney in an Enduring Power of Attorney or a Property and Affairs Lasting Power of Attorney and does not have the mental capacity to make a Property and Affairs Lasting Power of Attorney, an application must be made to the Court of Protection to issue a Deputyship Order. Enduring Powers of Attorney executed before 1 October 2007 are still valid and an Attorney has authority to act as soon as the Enduring Power of Attorney is executed. However, if and when the donor loses mental capacity, the Attorney must at that time register the original Enduring Power of Attorney with the Office of Public Guardian before having authority to continue to act as Attorney. An Attorney acting under a Property and Affairs Lasting Power of Attorney must in every case register the Property and Affairs Lasting Power of Attorney with the Office of the Public Guardian before having authority to act as Attorney. The Deputy or Attorney may need to deal with Jersey situate assets such as bank accounts or shares. Whilst the Deputyship Order or (registered) Enduring Power of Attorney or registered Property and Affairs Lasting Power of Attorney has effect in England and Wales, it does not in Jersey. The Deputyship Order, (registered) Enduring Power of Attorney or registered Property and Affairs Lasting Power of Attorney must also be registered into the records of the Royal Court of Jersey, before it has effect in the Island. Only after registration, will the asset holder in Jersey legally recognise the Attorney s or Deputy s authority and deal with that person. The relevant application is made in Chambers by way of a Representation. The following is required to accompany the representation for the Royal Court to deal with the registration: A Court sealed copy of the Deputyship Order, (registered) Enduring Power of Attorney or registered Property and Affairs Lasting Power of Attorney. A brief chronology leading up to the Deputyship Order, (registered) Enduring Power of Attorney or registered Property and Affairs Lasting Power of Attorney to ensure that the Royal Court is appraised of the circumstances in which the Deputy or Attorney was appointed A certified copy of the most recent valuation or statement relating to the asset in Jersey. Confirmation of the full name and residential address of any parties interested in the registration. Court stamps to the value of plus 10 Jurat stamps. Following the filing of the representation, the Act of Court confirming registration is usually issued within fourteen days. A certified copy of the Act of Court should then be provided to the asset holder to permit the Deputy or Attorney to deal with that asset. Janina Porter Voisin Law

6 Love in the Air at Mont à l Abbé School Members of Voisin law firm and Volaw trust company brought their musical talents to Mont à l Abbé School on 10 February for a special Valentine s event. Each school class was asked to submit their favourite love songs and the Voisin and Volaw team picked songs at random to perform one for each class. The whole school was present to enjoy the event in the school hall before they broke up for half term holiday. The Voisin and Volaw band, christened The Love Notes, was brought together just for this event and comprised Keith Ponter (Associate Director, Volaw) on guitar, Anne Hembry (Voisin s Probate and Estates Manager) playing the piano and Sandra Aguiar (Volaw Trust Officer) who was singing. Sharon Eddie, Head Teacher of Mont à l Abbé School, said: This type of event makes learning fun and has many educational benefits for the children including developing their creative talents, their sense of rhythm and social skills. We are very grateful to Voisin and Volaw for organising the event and as a thank you to the band the school choir gave a rendition of some of their current favourites. Anne Hembry added: Voisin and Volaw were really pleased to be able to arrange this event for the school. It is unusual for a Probate Manager, a Trust officer and a Compliance director to come together and do something that the children appreciate so much, and we are happy that we could use our musical talents to good effect. Free Wills Clinic Voisin s Wills and Probate team are able to offer a free Wills clinic to local companies. Our experts will visit your offices to talk about making a Will and give one-to-one advice to staff. Contact us for more information on Templar House, Don Road, St Helier, Jersey JE1 1AW, Channel Islands. Tel: +44(0) Fax: +44(0) mail@voisinlaw.com Voisin Advocates Solicitors & Notaries Public is a law firm regulated by the Law Society of Jersey. For further information about our firm and the services offered, please visit our website at Telephone: (+44) (0) Facsimile: (+44) (0) Voisin, Templar House, Don Road, St. Helier, Jersey, JE1 1AW, Channel Islands Voisin, Advocates, Solicitors & Notaries Public is a law firm regulated by the Law Society of Jersey To enquire about further Voisin publications or to unsubscribe from this newsletter, please georginajeffries@voisinlaw.com