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4 reasons why Legacy Administration is more than just ‘banking and thanking’

Legacy Administrators play an integral part in maximising income, guarding reputation and forecasting income. Eifron Hopper, Legacy Income Manager at RNLI and moderator at the Excellence in Legacy Administration conference 2018, explains the inherent challenges faced by Legacy Administrators…

I love my job, but it is certainly full of frustrations and challenges. Some of these concern matters within our charities, and some relate to the way we deal with the outside world.

I always try to use capital letters at the beginning of Legacy Administration. Perhaps I’m being pernickety, but it’s part of a campaign to get what we do recognised as more than just ‘banking & thanking’.

Clearly, I’ve not been very successful in my efforts, as it’s surprising how often I hear phrases like ‘I had no idea your department did all that’. This is important not just for our own self-esteem, but because it helps people to understand a bit more about our role in maximising income, guarding reputation and forecasting income.

Here’s some of the key challenges faced by Legacy Administrators and why the role extends much further than administration.

1. Legacy forecasting

At just about every charity I have worked for I have been asked in quarter one whether legacy income is going to reach its target by year-end. It is tempting to reply that it would be easier to predict the winning lottery numbers, but I usually take the opportunity to explain that legacy forecasting is notoriously difficult and that it is far better to work on a range of figures between £x and £y as our year-end expectations. After all, as one of the experts in this area, Chris Farmelo, says ‘…forecasts about legacy income, like those about the weather, are probably going to be wrong’.

2. Accruals

As I write this I am about to go into a meeting with our auditors. They are, of course, approachable and competent professionals but, in the past, one of the challenges thrown up by such meetings has centred on the matter of accrual. It sometimes feels as if any group of five auditors would come up with six different interpretations of the SORP rules that govern accruals – but then the same could be said about lawyers.

This is a particular problem in smaller charities, where the vagaries of individual legacy files mean that a blanket approach, applying averages, is less likely to work. In practice, it seems to me that our duty when discussing accruals is to let our colleagues know the implications of the policy they are adopting. Among these is the fact, obvious though it may seem, that accruing some of this year’s income into last year will have an impact on the figure that is received this year.

These internal matters are interesting enough in themselves, but maybe the external issues are the more challenging.

3. Maximising income and protecting reputation

As Legacy Administrators, we are in the front line when it comes to fulfilling the charity’s obligation to ensure that we receive what we are entitled to under a Will. This requires the application of a great degree of skill and knowledge to ensure (among other things) that Inheritance Tax has been calculated correctly; that the terms of a life interest created in a Will have been interpreted properly or that a proper assessment has been made of the mental capacity of the deceased person when the Will was signed. It also requires a considerable amount of guile when considering whether the estate should bear the cost of the parking fine the executor received when attending the funeral (a real case I encountered) or if the sale price of a property really should be reduced by 20% because of the discovery of Japanese knotweed.

As well as ensuring that our charity receives what it should, it is also our duty to ensure that when we question or challenge an executor, we take account of the need to protect our reputation. We need to make sure that the tone and the content of our letters, emails and phone calls are beyond reproach, even if we need to say some pretty hard things.

4. Erring on the side of caution

I have a fridge magnet bearing the quote ‘be wise as serpents and gentle as doves’, which seems to me to sum up the way we should operate. We need to make sure that we are not taken for a ride and that we don’t roll over to have our proverbial tummies tickled when we encounter something that is wrong, but we also need to make sure that we act calmly and decently when dealing with such matters. This is, of course, at its most acute when we are dealing with contentious matters when a settlement is being proposed or court action is being contemplated. Fortunately, in these cases, most of the solicitors we all use are also aware of the balancing act we must perform and advise us accordingly.

As I said, I love my job. In truth, I probably love the challenges too; they’re what make the job interesting.

This article was written by Eifron Hopper, Legacy Income Manager, RNLI, who will be moderating a panel discussion on the challenges and opportunities for legacy administration at the Excellence in Legacy Administration conference 4 December in London.

Click here for the full agenda and to register your place.

 

Excellence in Legacy Administration conference, 4 December 2018, London.

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