Lord Lucan is presumed dead, but what about other missing people?

empty armchair
Lord Lucan has been back in the news, with his son’s bid to inherit the title from his father, who disappeared in 1974 after the family nanny was found murdered.

But it throws into sharp focus the plight of around 30 – 40 families a year who lose a family member but are unable to prove a death.

The Presumption of Death Act 2013, which came into force in England and Wales in October 2014, much improved their position. Under the new law, which was passed after a lengthy campaign from the charity Missing People, families can apply for a Certificate of Presumed Death, which acts like a death certificate and means the estate can be administered.

However, many legal professionals are unfamiliar with the new law, and Missing People is actively campaigning to get it better known.

“Although the law helps families resolve their loved one’s affairs, making the decision to apply for a Declaration of Presumed Death is a difficult, daunting and emotional one,” said Susannah Drury, Director of Policy, Research and Development at Missing People, “The process is currently made all the more challenging as we know that there is a shortage of legal and financial professionals who are familiar with the new legislation.”

Sarah Young, Partner at Ridley and Hall Legal Limited, in Huddersfield, has used the Act a number of times and has more cases underway. “It’s working well,” she says, “It’s great that we now have this Act as it has raised public awareness that someone can be legally presumed to have died. The Act is also very useful in that it can dissolve a marriage or a civil partnership. Previously a separate application had to be made.”

She acknowledges, though, that even some legal professionals are not aware of the Act and have still been advising people they need to wait seven years. The fact that the Act refers to the old seven year rule does not help, she says.

The cost is also expensive for many people. Apart from the £480 fee, they have to place an ad in the local paper, which can easily be £200. They also find that placing an ad, and the requirement to send copies of court papers to any relative are a breach of their privacy, and can be problematic if family members don’t get on well or haven’t been in touch. “I suppose it is important as if it was private it could be concealing something dodgy,” she concedes, “but the families don’t much like it.”

Missing People’s Susannah Drury cites the case of one family whose suicidal 20 year old son with Asperger’s Syndrome disappeared in 2012. While he was witnessed jumping from the Humber Bridge, and had left suicide notes, no body was found, and the family decided to pursue a Certificate of Presumed Death.

The young man’s mother found she had to manage the application on her own after finding local law firms unfamiliar with the process. While it was ‘bittersweet’ when the judge granted a Presumption of Death certificate, the family was finally able to deal with such practicalities as closing accounts and stopping letters addressed to him.

Rita Bhargava TEP, a partner at Russell-Cooke Solicitors in London, notes how important this is for families. “While the Act cannot address the trauma and emotional struggles caused by the disappearance of a loved one, it will finally allow the family to deal with their loved one’s estate, giving them some closure,” she says.

Missing People has published information for professionals working with families on a missing person’s financial or legal affairs:

Joanna Pegum, STEP PR & Media Executive

Money laundering and ‘The Red Tape Challenge’

George HodgsonMost STEP members, almost wherever they are based, would probably agree that we are facing a real risk of bureaucratic meltdown. Practitioners have only just negotiated the joys of the US Foreign Account Tax Compliance Act, FATCA, but they must now focus on the Common Reporting Standard, CRS (not forgetting the UK/Crown Dependencies and Overseas Territories inter-governmental agreements). At the same time, many jurisdictions are now beefing up their anti-money laundering (AML) regimes in the wake of the revisions to the Financial Action Task Force international AML standards, with Europe now working on implementing the 4th AML Directive.

On top of all that, many STEP members will also need to think about the new European Markets in Financial Instruments Directive and the additional burdens that will place on investors in terms of registering and reporting.

In this environment STEP practitioners will probably welcome the announcement that the UK government, philosophically committed to cutting regulation and bureaucracy, has launched a so-called ‘Red Tape Challenge’ to see if there is any unnecessary bureaucracy in the AML area. This informal consultation closes on 23 October.

STEP has already made a short submission based on feedback we have received from members (see more). Our submission focuses first on the problems faced by those who don’t fit the normal tick boxes many financial institutions now use for AML checks.

Second, we highlight the growing difficulty many STEP members report in doing business with financial institutions as they switch to a much more risk averse approach.

Finally, we highlight the absurdity that practitioners in the UK now find themselves having to struggle with three different new reporting processes (FATCA/CRS, the Corporate Register of Persons with Significant Control and the Legal Entity Identifier registration process under MiFIR, the Markets in Financial Instruments Regulation). These are all broadly focused on tracking beneficial ownership, but coming through with no attempt at coordination, or to share either the administrative burden or cost.

Of course given that many of the problems we have identified flow from initiatives launched by the current UK administration, it may be politically difficult for the current government to change tack.

Nonetheless, if STEP members want to make their own submissions to the current consultation process, that may add to the pressure for a government philosophically committed to cutting the regulatory burden on business to examine if there any easier ways of achieving its AML policy objectives than those currently on the table.

George Hodgson, Deputy Chief Executive, STEP

The US’s status under the CRS

George Hodgson, Deputy Chief Executive, STEPThis week the IRS confirmed that it has begun fulfilling its obligations to those jurisdictions with which the US government has signed a Model 1A inter-governmental agreement. Under the reciprocal exchange accords, it has transmitted information on those who are tax resident outside the US to the relevant national tax authorities. This puts the spotlight on the US’s position under the OECD’s Common Reporting Standard (CRS).

The US has made it clear that it does not intend to adopt the CRS, arguing that FATCA (US Foreign Account Tax Compliance Act ) better fulfils its needs. This leaves the US as a ‘non-participating jurisdiction’ under the CRS regulations. While under the CRS there is no equivalent of the withholding sanction that is the big stick underpinning FATCA, the result of the US being a non-participating jurisdiction is that all Financial Institutions (FIs) in the CRS will need to treat any US Reporting FI as a Non-Financial Foreign Entity (NFFE). In English, what that means is that any CRS FI holding an account for a US FI (such as a trust in Wyoming, South Dakota or wherever) will need to ‘look through’ the US FI and establish – and report if need be – on its controlling persons.

Some will find this perverse given that the US is exchanging information with many CRS jurisdictions, but not via the CRS. It’s a position the OECD seems to be holding, however, and it raises issues that STEP members should be aware of when dealing with US FIs.

George Hodgson, Deputy Chief Executive, STEP

Specialist apprenticeships on the way

Nigel Race, Director Professional Development, STEPThe Private Client industry continues to grow as a legal area and demand for private client legal services will only increase as the UK’s demographics change. It is good news, then, that a new apprenticeship in probate has been approved. The apprenticeships will open the door to a younger and more diverse labour pool than exists at present.

And aside from helping to meet the demand for estate administration, the apprenticeship will ensure a well-qualified group, grounded in practical experience and mentored and supervised by specialists in their firms, will increasingly be handling this sensitive area of work and at a level of complexity to suit their competence. STEP has advocated the regulation of will writing and estate administration for many years but, in the absence of regulation, believe this supervised and controlled development of an appropriately skilled work-force is key.

Developed by a group of employers focused on estate administration, with the support of STEP, CLTI and CLC, the new Probate Technician programme offers an exciting career opportunity for those wishing to work in probate but who do not have a prior legal qualification.

The Probate Technician Standard apprenticeship was developed by a consortium of specialist practitioners led by Andrea Pierce of Kings Court Trust together with input at the designated meetings from Michelmores LLP, Irwin Mitchell LLP, Stratega Law, Withy King LLP, Goodwills, and with the support of STEP as the relevant professional body in the private client sphere. Many other forms supported the project through survey responses.

Those qualifying as a Probate Technician will have proof of achievement of expertise in a specialist area of law – making them more attractive to prospective employers, and helping them get that crucial first step on the career ladder. They will also be able to apply for STEP affiliation.

The apprenticeship is part of the UK government’s Trailblazer scheme and is due to come in for the academic year 2017-18. Employers will be able to apply for assistance with their cost for training apprentices.

Read more

Nigel Race, Director, Professional Development, STEP