Secrets and lies: will drafting

Client confidentiality is
a ‘holy’ concept of the solicitor’s profession. Enshrined in number four of the Solicitors Regulation Authority (SRA) Principles – acting in the best interests of each client – is the duty of confidentiality and obligations regarding conflicts of interests. Less often discussed is that this also extends to the disclosure of material information to clients (chapter four, SRA Code of Conduct and outcome 4.2).

Personal affairs

As families become more complex, with clients on their third or fourth marriage and children from different relationships, there comes an increasing openness about personal affairs. Does this mean mistresses and illegitimate children, secrets and lies, are no more? No.

Is there a solicitor out there who hasn’t had someone ask them to keep something confidential? What if our client wants to include confidential provision in their will?

First, consider professional duties. If your firm acts for a couple, or even a family member or other beneficiary, does your duty of disclosure cause a conflict? Outcome 4.3 states that the duty of confidentiality takes precedence, but outcome 4.4 prevents you from acting except in limited circumstances.

For Society of Trust and Estates Practitioners (STEP) members, the new STEP Code for Will Preparation is even
more specific (paragraph 4(v))
and may require you to refuse instructions.

A common solution
to a client’s request for confidentiality is including a flexible discretionary trust in the will. Only potential beneficiaries need be named and the testator can leave a confidential letter of wishes to his executors/trustees specifying when, how and in what proportions they should benefit.

However, this may not be sufficient for all clients. They may not want a potential beneficiary to know they
could benefit and, although beneficiaries have no specific right to see letters of wishes, cases have disclosed them (for example, Breakspear and others v Ackland and others (2008)). A secret or half-secret trust may therefore be appropriate.

Drafting a secret or half-secret trust must be undertaken with care as different requirements apply to each. The main differences are:

Fully secret trust:

• not identified in the will, but expressed as an absolute gift to the secret trustees;
• trust terms may be communicated to the secret trustees after the will is executed, provided that it is in the testator’s lifetime.

Half-secret trust:

• evident as a trust (but not its terms) from the face of the will;
• the trust terms must be communicated to the secret trustees before the will is executed.

Half-secret trusts are often preferable because they are evident and consequently
more easily enforceable. Fully
secret trusts are usually only appropriate where the testator requires absolute secrecy.

Welcome guidance

The High Court recently
gave welcome guidance
on the drafting of secret and
half-secret trusts in a case concerning the artist Lucien Freud (Rawstron v Freud (2014)). Freud’s son failed to establish that the £42m secret trust of residue in his father’s will should be construed as a half-secret trust. Key to his assertions
were that:

• other terms of the will (administrative provisions and distribution of chattels by wishes);
• one of the executrices/trustees was Freud’s solicitor; and
• the definition of ‘residue’ and avoidance of ‘absolute’ wording in the residuary gift, demonstrated the existence of a trust, which therefore must be half-secret as evident in the will.

It is heartening that the court applied the natural meaning of the words used by the will in spite of those factors, holding that “neither separately nor cumulatively do these points answer or outweigh the essential point… that the gift…is expressed as a simple gift of residue, and… contains no mention of a trust”; not least because it leaves open the possibility of solicitors acting
as secret trustees.

Duties to clients do not
cease on death, but pass to
their personal representatives.
Ensure your policies prevent confidential information being given out to others unless a formal Larke v Nugus (1979) request is received.

If you haven’t reviewed them recently, consider the Law Society’s practice notes (PNs) ‘File retention: wills and probate’ and ‘Disputed wills’, as they are regularly updated.

Do your terms of business confirm your policy on retaining/destroying original wills and supporting files? Probate claims are on the up and limitation periods are much longer than for other work. I know of firms who still routinely destroy revoked wills in direct opposition to the advice given in the PNs (which were changed in 2011). SJ

Sarah Roberts is a solicitor at Thomas Eggar ?