Division D: 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.