3. Chamberlink May 51-72.qxp_Chamberlink 29/04/2021 09:45 Page 60
Sector Focus
Legal
Sponsored by: Thursfields Solicitors
Insolvency rules extended
Include pets in your will
The extension of temporary measures to protect businesses and their directors during the coronavirus pandemic has been welcomed by corporate lawyer Sam Pedley. Mr Pedley, a partner at Midlands law firm Mfg Solicitors, said businesses had been given vital ‘breathing space’, thanks to the extension of two insolvency measures until the end of June. Measures brought in last summer as part of the UK Corporate Insolvency and Governance Act 2020 provided temporary protections during the coronavirus crisis. One measure was the suspension of personal liability for ‘wrongful trading’, which has protected directors from being prosecuted if they fail to act in the best interests of their company’s creditors, once the business becomes insolvent. That was meant to have ended on 30 April 2021, but has now been extended. The other measure prohibits creditors filing winding-up petitions on the basis of statutory demands or where Covid-19 has had a financial effect on a company. That measure was meant to have expired at the end of March 2021 but has also been extended. Mr Pedley, from Mfg’s commercial litigation department, said: “The extension of these temporary provisions provides ongoing breathing space to companies whilst coronavirus-related restrictions remain in place, ensuring that an immediate cliff edge is avoided. “Both measures go hand-inhand when it comes to protecting commercial tenants who might otherwise have been confronted with a raft of statutory demands this spring. “The extension until 30 June covers businesses until the planned end of legal limits on social contact, currently set at 21 June 2021. Whether this is the final extension remains to be seen, but for now this is a much needed lifeline for businesses who find their ability to trade severely hampered by things that are completely beyond their control.”
A staggering 3.2 million of UK households have acquired a pet during lockdown, and lawyers are now encouraging owners to update their wills to cover the new member of the family. The surge in pet-owning homes takes the national total to 17 million, according to the Pet Food Manufacturers’ Association, and lawyers say owners should make sure these animals are provided for after their death. Private capital expert Paul Davies from national law firm Clarke Willmott says adding a pet to your will is simple, and can save a lot of stress later down the line. He said: “Everyone knows that a pet is not just for Christmas and it’s not just for lockdown either. Taking ownership of a pet is a big decision and part of that is considering what would happen to your pet when you die. “A pet can be left under the terms of your will and there are various options available. The most formal is a trust in the owner’s will with trustees given a sum of money to provide for the pet’s care and asked to find a home for them. This needs to be carefully drafted by a legal expert. “Another option is to give the pet to an individual in the will with a request that they provide a home for the pet. “The request would not be legally binding so thought would have to be given as to what happens if the person can’t or won’t look after the pet. “The least formal option is a letter of
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wishes accompanying the will setting out how you would like the executors to deal with your pet. This can be updated without changing the will but is not legally binding, although it would have moral force. “It might also be possible to ask a charity to rehome your pet. For example, the Dogs’ Trust operates a scheme whereby the owner completes a canine care card. Someone is chosen by the owner as the Dog Guardian who can pass over ownership of the dog to the Dogs’ Trust who will then attempt to find a new home. “One of your executors may be the best choice of Dog Guardian and it would be a good idea to include these instructions in your will. The owner might like to leave a legacy to the charity rehoming the pet. “A similar service for cats is offered by Cats’ Protection and both charities pledge never to put down an animal because a new home can’t be found.” Clarke Willmott recently developed a free, online tool called ‘Which Will?’ to assist people looking into making or updating a will. The tool prompts the user to think about what is important to them when making a will and recommends which will best meets their needs.
Paul Davies: Don’t forget about your pets when you shuffle off this mortal coil
Charities must delegate authority It is crucial for all charities to have an official delegated authority in place so that their trustees are legally protected, according to Thursfields Solicitors. The warning is part of new advice that the Midlands law firm is issuing to the third sector on legacy income and protecting charity trustees. Katherine Ellis, a senior associate solicitor in the charities and communities sector team at Thursfields, said it was important for all charities to have an official delegated authority in place to avoid possible personal liabilities. Ms Ellis said: “A delegated authority confirms which charity employees may carry out which specific tasks or make certain decisions on behalf of the charity’s trustees. “Without this, even simple tasks such as approving estate accounts, acknowledging receipt of legacy income, or making decisions about
Katherine Ellis: Trustees should have written agreement about their obligations
an estate and any arising issues should not be undertaken by anyone other than the trustees. “To do otherwise presents risks for not only the trustees but also the employees involved as, even if they were acting in good faith, both could find themselves personally liable if an issue were to arise later down the line.”
Ms Ellis explained that it was unlikely to be feasible or practical for charity trustees to oversee every action that might arise. She said this is why it was imperative that an official delegated authority document existed for the protection of the charity’s trustees, employees, and the whole charity. Ms Ellis said: “This document clearly sets out which charity employee or employees are permitted to undertake which tasks, and how far their powers of decision-making extend. “It is also essential that existing forms of delegated authority are reviewed and updated periodically. “Also, trustees may wish to bring certain aspects of the legacy management role under their control, or to rely more heavily on specialist staff to oversee additional aspects of the legacy management process, allowing them greater decision-making scope.”
