How to cheat death with thorough record keeping

Accountants face a protracted and ugly court battle if their advice is
brought into question following the death of a client.

The battle for control of assets following a death can turn the spotlight on
an accountant and pivotal advice which may have played a role in the final
dividend received by will beneficiaries.

James Roberts, professional risk partner with legal firm Barlow Lyde &
Gilbert, said it was an emerging area of the law. “It is all too easy for a
disappointed beneficiary to raise questions which rely on oral discussions that
may go back many years,” he said.

“I think this is on the developing edge of the law.”

He said the situation can be particularly tense when the accountant is also
the executer of the will, which might bring their advice under scrutiny.

“Tension is often running high and you have long standing scores to be
settled, it is often a long standing adviser who is going to be the executer and
they are now in this unenviable position of opening old wounds,” he said.

Terry Jordan, capital taxes consultant with London-based BKL Tax, said
taxation is one, but not the only, area which can lead to litigation after a
client’s death.

He recalls advising one client and his family on the preparation of their
will. “I had a meeting with him and his wife,” he said. “I then had a subsequent
telephone conversation with the father who said he had a child from a previous
relationship and asking whether he should have mentioned it… my answer was yes.”

He said an increasingly litigious culture surrounding wills should put
accountants on their guard.

However, he believes that good record keeping is the key to staying out of
court. “It is important to record what advice is to be expected and, if the
accountant is providing inheritance tax advice, it is essential a proper record
of that advice has been made.

“The potential danger is that, if the accountant was offering taxation
advice, that could be helped to cover all taxes, including inheritance tax.”

Kevin Dickens, president of the UK200Group, said it was essential for
accountants to keep thorough records in case the worst happens and the advice
given needs to be looked at to prove what was, or was not, said.

“We always say that ‘where there’s a will, there’s a relative’ and when
coupled with ‘hindsight is a wonderful thing’ then danger looms,” he said.

“What we really need to emphasise is that will writing and inheritance tax
planning need careful thought, perfect record keeping and an ability to help
clients achieve their objectives.”

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