Professional Practice advice: when to retain old principal wills; and what to do with residual client balances
Is our firm under a professional obligation to retain old principal wills indefinitely?
The position here will depend on the circumstances. There are three different scenarios which might apply.
Scenario 1: The firm is holding a will for the testator but the solicitors do not know whether the testator is alive.
Generally, the period for which a firm should retain wills depends on any provision regarding retention within the firm’s terms of engagement letter with the testator clients. However, notwithstanding any agreement with the client on retention, wills should be retained indefinitely and kept separately from correspondence. As outlined in Law, Practice and Conduct for Solicitors by Paterson and Ritchie (2nd ed), it is important that firms do not destroy wills without instructions unless the testator “could not possibly still be alive”.
Scenario 2: The firm is holding a will but the testator is deceased and the estate has been wound up.
Where the matter is closed, i.e. where the administration of the estate has been completed and closed and all beneficiaries have been paid, the will could then be destroyed along with the file (Society guidance suggests 10 years after completion). There is an exception: the firm might want to keep the will indefinitely where it is also a link in title for conveyancing purposes.
Scenario 3: The firm is holding a will but the testator is deceased and the estate has not been wound up.
Again, notwithstanding any agreement with the client on retention, wills should be retained indefinitely and kept separately from correspondence.
For the avoidance of doubt, the GDPR and the Data Protection Bill will have no impact on a firm’s responsibility to retain principal wills. Even in the absence of any engagement letter, a firm’s professional obligation to retain these documents provides a “legitimate reason” to store them.
Our firm has residual client balances. Are you able to advise on how to deal with these?
The rules on client balances are contained in practice rule B6.11.
The solicitor should contact the former client to return the residual balance. If the former client’s whereabouts are unknown, or if he or she refuses to cash the cheque (this has happened), the options available will depend on the amounts held.
Up to £9.99: If the balance is less than £10 it may be retained by the firm, as the cost of sending it out is deemed too high to warrant doing so (rule B6.11.7). The practice unit may take the balance to a fee and may aggregate that balance with other balances less than £10 in a single fee, provided such single fee includes a list of each of the balances and related clients which are included. There is of course nothing to prevent the firm paying these smaller sums to a charity.
Between £10 and £49.99: If the balance is between £10 and £49.99, it must be paid either to the Queen’s & Lord Treasurer’s Remembrancer (QLTR) or to a registered charity of the firm’s choice (this could, of course, be the Lawscot Foundation) (rule B6.11.3). In certain circumstances, it will only be appropriate to send the funds to QLTR, e.g. where a company or a limited liability partnership is dissolved the balance represents Crown property and can only be submitted to QLTR.
£50 or over: If the amount held is £50 or more, the firm must make “reasonable endeavours, having regard to the actual amount of money held” to trace the client, and a reasonable fee can be charged for doing so. If those endeavours are unsuccessful, the balance after deducting the reasonable fee must be paid to QLTR accompanied by a note of the client’s name, last known address and what steps have been taken to trace the client (rules B6.11.4-B6.11.6).