Supporting Legacy Managers through technology

I left my role as a private client lawyer in January 2022. Since I’ve fully committed to innovating law through legal technology. But, after 15 years as a private client lawyer in various levels of qualification, the joys and frustrations of private client work are still etched in my heart and seared into my memory. I’ll start with some of the joys, as it’s a New Year after all.

When taking instructions to draft a will, it was common for most of them to include a charitable legacy. This is supported by data from Legacy Foresight which found that, on average, there are around 3 charitable bequests per will. Initiatives like “Make a Will Week” and more sophisticated marketing techniques have been helpful raising awareness around charitable giving through wills. Better practises from lawyers in checklists and drafting tools (old dogs can learn new tricks) helped to make sure these issues were covered during client interviews and emphasised where necessary (i.e. around creating discretionary trust terms).

When you add population growth into the mix, it’s no surprise that charitable legacies increased by 50% in the last 30 years. Gifts in wills are now worth £3bn to charities.

Anecdotally, I believe people are just more generous than they used to be, with lifetime charitable giving and fundraising becoming part of “who they are” - they want to make an impact, which spills over into their legacy considerations.

Looking back, I’ve overseen millions of pounds of charitable legacies. And this type of work, whether simple or complex, was joyful…. Until it came to communication with beneficiaries.

We’re not communicating well

I need to emphasise that this is no fault of the beneficiaries themselves.

Rather, this is the fault of the mechanisms that were available at the time and remain entrenched. Email was still somewhat of a novelty in those early days, but even in recent years, a standard initial letter was circulated with forms to complete. There were separate letters for: lay beneficiaries and charitable beneficiaries, specific bequests, pecuniary legacies and residuary legacies. If you were lucky, you’d have access to well-drafted precedents, time and expertise to set up a nice mail-merge. Otherwise, expect to clear your lunch plans as you dictate the letters for your secretary.

In the past, this felt like “good” work.

Notifying beneficiaries is, of course, an essential part of the estate administration process. It sets the scene for ongoing communication, tax planning considerations, distributions and winding up the estate with all relevant documentation being circulated and approved. After all, executors have a fiduciary duty to their beneficiaries and, subsequently, lawyers take on this responsibility as the executors’ agents. It is apparent to me that if executors are a firm’s clients, the beneficiaries are their customers.

Yet, from our feedback from legacy managers, customer satisfaction remains low because of poor communication.

Email is not enough

The trend in law is to have fewer direct support staff and better tools. I witnessed pools of secretaries become outsourced, which put a strain on dictation turnaround times. And forget about collating enclosures remotely! Client and customer expectations around reply times has increased, meaning that lawyers embrace the immediacy of email and the ability to self-serve with technology. Email has many benefits and remains a key communication tool, but it has several disadvantages:

• it is hard to track instructions;
• it is not secure;
• subjects diverge;
• it proliferates readily;
• it can be sent to the wrong recipient;
• it is time consuming; and
• it is rarely automated.

LegalTech is having its renaissance moment and the number of tools to support legal work is increasing. This is a direct response to fewer secretaries, cost pressures and the need to do more with less.

Innovation in other areas of technology are making their way into law after showing significant gains in other industries, such as banking and accounting. The nature of legal work presents further challenges.

Specifically, much of the data is qualitative rather than quantitative and, therefore, software developers and product managers must spend even more time with their end users to understand the nuances. I find it telling that in all the firms I worked for, from small boutique firms to larger multinational firms, every attempt to use a specific probate case management system failed. Our accounting systems for trusts and tax returns, however, were always in place and well loved.

When administering an estate with multiple beneficiaries of differing needs, I’d often be confronted with the following questions:

1. Have all the beneficiaries acknowledged the initial letter?
2. Have I verified each of the beneficiary’s identity?
3. Are they all clear of bankruptcy?
4. Do I have bank details for each beneficiary?
5. Have their documents been certified correctly?
6. Who wants to receive legacies in specie?
7. Have they approved, say, the Estate Accounts?
8. Have they all returned their receipts?
9. Am I complying with best practices and regulatory requirements?

These are just the tip of the iceberg.

And this iceberg requires a lot of checking, chasing and updating spreadsheets.

The straw that broke the camel’s back

It came to a head when I was to oversee an estate of 100 beneficiaries (charitable and lay beneficiaries spread globally). While it was an outlier compared to most estates, dealing with the final distribution was an enormous task and certainly stretched my project management skills.

We pulled it off, but it was very expensive for the estate; and even then, it was carried out at a loss to the firm. The cost concerns were noted in the attendance note, but testamentary freedom remains a pillar of the law for wills.

During this time, I opened a new bank account with a challenger bank. I couldn’t reconcile how it took me a few clicks and a weekend to have a new regulated bank account, yet I was asking beneficiaries to wait months simply to give them their money.

Yes, of course, the parameters were different. Nevertheless, my eyes had been opened to better AML processes and open banking technology.

I resolved to make it my New Year’s resolution to found a start-up.

A start-up that brought a technological solution to the pain points faced by beneficiaries.

And SenseCheck was born.

Welcome to SenseCheck

The first release of SenseCheck provides a way for lawyers to onboard their clients digitally, using many of the same techniques other AML providers have established.

SenseCheck uniquely responds to the challenges for beneficiaries by providing an enhanced beneficiary identification process, designed to be WIQS (Wills & Inheritance Quality Scheme) compliant.

A SenseCheck search verifies the beneficiaries:

1. address;
2. bankruptcy and IVA status;
3. ID (Passport, Driving Licence and / or National Insurance Number);
4. PEP / Sanctions; and
5. mortality

• Rather than a paper form to complete, which will invariably be input by a lawyer or their secretary, beneficiaries receive a link to create an account and upload their details securely. From there, the lawyer can perform a SenseCheck search.
• For payment verifications, a request can be made prior to distribution by the lawyer to confirm the beneficiary’s bank details. The beneficiary is taken through a secure open banking verification process to confirm their account details. The process for the beneficiary is similar to logging into their online banking provider and the lawyer receives a report confirming the details. SenseCheck will also return a bankruptcy and IVA check, which is helpful for lawyers who adhere to WIQS.

SenseCheck also provides progress status visibility and document sharing.

You can read more about SenseCheck, its benefits and its features here.

Together with our team of software engineers and technology partners, we’ve built the workflow tool I wish I had when I was a lawyer.

Importantly, it doesn’t replace a case management system or require significant process change. Its API driven for interoperability with case management systems on both the beneficiary and lawyer sides.

New Year, New Features

At an early stage, we recognised that to be a tool that adds value to lawyers and beneficiaries, we must treat charity legatees as first class users. We’ve started that journey after consulting with the charity community and the Institute’s members.

In my former life, I would spend billable hours cross referencing the charitable legacy in the Will against their website and the Charity Commission database. I would then produce my own (ad hoc) reports for my file and update our internal address book. In 2022, we are incorporating the Charity Commission’s API into SenseCheck to provide search functionality to lawyers.

Lawyers will be able to add charity beneficiaries to their SenseCheck matters in the same way as lay beneficiaries.

For verification purposes, we are inviting charities to register their SenseCheck account and verify ownership. The final step will be to work with our open banking partners to provide a streamlined bank verification process, for whichever nominated account the legacy manager provides. This requires more input from charities and legacy managers, as not all charities and campaigns operate in the same way. I’d love to hear your thoughts so please do get in touch.

By providing an accessible platform for lawyers, executors and beneficiaries we can add value to all parties. Charities should be notified and updated more quickly and lawyers can handle higher volumes while keeping costs down.

The pandemic has driven technology adoption through remote working. It’s time to let lawyers focus on carrying out more complex work with fewer cost pressures and make distributions more efficient, so all those legacies can make an impact.

This article was written for the Institute of Legacy Managers by Jay Smith