Electronic wills need safeguards, warns Institute of Legacy Management

In its reply to a Law Commission consultation on modernising legacies, the ILM says tighter regulation and standardisation of online will-writing platforms is needed

Charities could miss out on legacies if electronic wills are introduced without the necessary safeguards and standards to ensure they can be enforced in law, the Institute of Legacy Management has warned.

The ILM’s statement comes in response to a Law Commission consultation that considers ways of modernising legacy law and making sure it is easier to implement people’s wishes as noted in their wills. The consultation closes today.

The Law Commission’s proposals include making provision for electronic wills, which are loosely defined as using digital technology during the process of creating or executing a will, and giving courts the power to recognise a will where formal rules have not been followed but the will-maker has made their intentions explicitly clear.

In its submission to the consultation, the ILM said the proposals failed to acknowledge that a growing trend for producing electronic wills was already having an effect.

The ILM said tighter regulation and standardisation of online will-writing platforms could help to ensure that new technology was introduced while retaining essential safeguards and standards.

It said the consultation allowed the Lord Chancellor to introduce electronic wills without specifying the timeline or level of public consultation required.

Chris Millward, chief executive of the ILM, said: “The consultation seems to defer all conversation on technology in the will process, suggesting it’s a future problem. But we know that people writing wills online is having an impact now and requires considerable consideration, fast.

“Our members are already seeing the consequences of wills made online and, as we become more reliant on technology, this is likely to increase. There is a risk of badly drawn-up wills resulting in donors’ final wishes being frustrated and failing, which means charities and their beneficiaries will miss out on vital support. The introduction of fully electronic wills would complicate the process further.”

The charity legacy consortium Remember A Charity also warned in its submission to the consultation that safeguards were required to make sure electronic and video wills were not easily challenged in court. But it welcomed the idea of bringing wills “out of the dark ages” through new technology.

Rob Cope, director of Remember A Charity, said: “We need to be mindful that relaxing the laws around what makes a will legally valid could create uncertainty and increase the scope for legacy disputes. This means having more accessible, regulated will-writing opportunities, while ensuring appropriate checks are in place to test mental capacity and protect against undue influence.

“With the number of contested wills rising, charities are keen to avoid the emotional, financial and reputational costs associated with inheritance disputes, defending donors’ wishes and their own legal obligation for funds allocated to them.”

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Mencap warns 25% of independent children’s homes could close

The charity fears that the requirement for learning disability organisations to fund back-pay for sleep-in carers will threaten provision for children’s homes

A quarter of independent children’s homes could close immediately if the government does not fully fund the £400m sleep-in care back-pay bill that is affecting care and learning disability charities, Mencap has warned.

The warning comes after a row with the government over back pay for sleep-in workers, who are used widely in the learning disability sector to provide care for vulnerable adults. Until recently workers were paid a flat-rate, “on-call” allowance rather than the national minimum wage.

After it had discussions with other organisations in the wider children and elderly care sectors, Mencap said that 25 per cent of independent children’s homes could be forced to close if HM Revenue & Customs was to start collecting up to six years of back-pay for sleep-in care workers.

Approximately three-quarters of children’s care services are run by independent providers, according to Mencap, and the charity is campaigning for the government to fully fund the back-pay bill to prevent the sector collapsing.

The sleep-in care crisis comes after two employment tribunal decisions made last year forced the Department for Business, Energy and Industrial Strategy to change its guidance to ensure that the national minimum wage applied to sleep-in carers.

Before this, sleep-in care workers were typically paid a flat rate of £35 to £45, with workers receiving either the national minimum wage or the national living wage for the hours they spent providing care, according to the Voluntary Organisations Disability Group, which represents charities that provide services to disabled people.

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Earlier this year, HMRC began asking some disability charities to give six years of back pay to affected staff, which Mencap estimated could cost the learning disability care sector £400m, and Mencap itself £20m.

HMRC’s enforcement action has twice been suspended, but is due to begin again from 2 November. The government is due to announce what action it will take before the end of the month.

Mencap chairman Derek Lewis said: “The government has created a perfect storm for providers from across the care sector.

“I urge government to recognise its responsibilities and commit to funding all ‘sleep-in’ back-payment liabilities. Assuming, as has been suggested by some, that providers can ‘trade through’ the crisis that is about to engulf children’s and learning disability care would be a catastrophic mistake.

“As government looks set to impose a new compliance regime for providers, it might spare a thought for the people – young and old – whose lives depend on the future of high-quality, independently provided social care. Once it’s gone, it’s gone.”

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NCVO says better communication with trustees required after regulator warns charity

The umbrella body said it was “alarming” that the chair of the charity that received the Charity Commission’s first official warning did not understand her role

The sector must get better at reaching trustees “who may not fully understand their roles” the National Council for Voluntary Organisations has said, after the Charity Commission warned a charity which paid a trustee and spent most of its income on fundraising.

The National Hereditary Breast Cancer Helpline was issued with the first official warning by the Charity Commission last month after the charity failed to address concerns about its finances.

Wendy Watson, the charity’s founder, paid herself £31,000 for running the charity while she was chair, a payment which had not been properly authorised and which she says was an error.

The charity had also been criticised for spending large amounts on staff, charity shop and sales costs, which meant that the charity was only spending a fraction of its income on running its helpline.

While the charity shops brought in 90 per cent of the charity’s income, according to its accounts for the year ending 31 March 2016 store costs and fundraising accounted for £409,227 of its total income of £924,827.

Staff costs were also £397,168 and cost of sales accounted for £123,580, the accounts show.

The charity’s 2015 accounts show that only £27,403 was spent on charitable activities, despite a total income that year of £974,555.

Speaking to Sky News yesterday, Watson said she wanted to make the charity more sustainable so she could retire and hire staff to run the helpline, which she had been running voluntarily by herself.

She said: “Mistakes were made. I’m not a businesswoman, I’m somebody passionate that wants to keep the helpline going and find a way to raise some money to do that.

“The charity needed to make the shops more profitable, which is what we’ve been doing. That will enable me to train others to work on the helpline so that I can retire.”

A report released by the Charity Commission last month says that the charity had been “exposed to undue risk through a lack of appropriate financial controls and its financial model was unsustainable”.

The report also criticises the unauthorised payments made to Watson and the charity’s receipt of interest-free loans from a trustee “for which no formal agreement or repayment schedule was in place”.

The report says: “Specifically, although the former chair had resigned as a trustee, she continued to run the charity’s operations without any formal role and continued to receive payments.

“They were continuing to allow the former chair to make key decisions about the operation of the charity, despite having resigned as a trustee.”

The charity’s failure to properly address the issues raised by the regulator led to the commission issuing an official warning under the Charities Act 2011 – the first time it has used these new powers.

The warning calls on the charity to review the loan arrangements it has in place, properly record board-level decisions and improve its financial controls.

Aidan Warner, external relations manager at NCVO, said: “It’s obvious that Mrs Watson is very well intentioned but this case is the perfect reminder that good intentions are not enough to run a successful charity.

“There’s a major question as to how the trustees ever arrived at the strategy of rapidly opening a large chain of shops in order to try and support a small, low-cost helpline.

“It’s alarming that Mrs Watson didn’t properly understand her role as a trustee, and that matters didn’t improve even after the commission’s involvement.

“We have lots of guidance available on trusteeship which is very well used. But I think all of us in the sector should think about what more we can do to reach those trustees who may not fully understand their roles.”

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Regulated period for an election ‘might have begun already’, warns lawyer

Simon Steeden of Bates Wells Braithwaite points out that if there is another election this year the regulated period is already with us, and describes the lobbying act as Orwellian

The next period of regulated campaigning might have already begun, a partner at the law firm Bates Wells Braithwaite has warned.

Simon Steeden said that if a second election were to be called before the end of the year, the period of regulated campaigning would already have started because it covers the year leading up to a vote.

Last week’s election was called with just two months’ notice, leaving many charities concerned that they could be penalised for activities that took place before they knew an election would happen.

And the failure of the Conservatives to secure an overall majority in the House of Commons means another election could take place before the end of year, said Steeden.

He said the snap general election had demonstrated the unfairness of the lobbying act, which requires all campaigning bodies, including charities, to register if they intend to spend more than £20,000 in the year before an election on campaigning activities that could reasonably be regarded as intending to influence the outcome of the vote.

In an email to charities sent out this morning, Steeden described the lobbying act as “Orwellian”.

He said: “This election has raised further questions as to whether the current rules governing non-party election campaigning are fit for purpose.”

He pointed to the 50 charities that wrote to all of the political parties during the campaign expressing concern about what he described as “retrospective regulation”.

“The hung parliament means that the spectre of another vote will be ever-present, and campaigners will be assumed to be on constant election footing,” he said.

“For example, this could mean that the regulated period for the next election begins today, meaning that campaign groups potentially have to start counting expenditure today.”

He said this would “supercharge” the debate around the lobbying act and would make its reform “an urgent priority”.

“The snap election campaign clearly highlighted the unfair nature of rules regulating non-party election campaigning and their chilling effect on civil society engagement in policy debates during an election campaign,” he said.

In the run-up to the snap election, he said, many charities had relied on the assumption that their previous expenditure could not be “reasonably regarded” as intended to influence the election because they did not know it would happen.

But he warned it might be harder to rely on that assumption if a second election was called, because charities might reasonably be regarded as being “on constant election footing” in preparation for the possibility of an election.

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