Clients will appoint partners to act as executors in their wills, but this causes problems when a firm converts to LLP status, says Tim Addinell

One unexpected problem of a law firm converting to limited liability partnership (LLP) status is that it will affect the private client department.

Many clients will have appointed in their wills partners in the firm to act as their executors.

The well-drafted appointment clause takes into account the possibility that the firm will change in some way, perhaps a change of name, merger, or takeover.

A typical wording might be an appointment of 'the partners in the firm of [name] or the firm, which at that date has succeeded to, and carries on its practice'.

The intention of the testator is to appoint professional executors, and a change in business of those executors should not defeat the appointment.

One would assume that such a clause should cover all eventualities, including where the firm converted to an LLP, and is therefore 'the firm that has succeeded to'.

Unfortunately, this is not the case.

At the Probate Registrar's annual conference last year, the validity of such appointments was discussed in an attempt to eliminate the inconsistency of approach that had previously existed.

The final view of the registrars was that 'where a firm becomes an LLP, then the basis on which a testator had previously appointed the partners in that firm as executors has changed, to make the appointment void'.

Going on to deal with how the appointment may be saved, the registrars state that if 'there is evidence to show that the testator intended the partners to act in the administration of the estate irrespective of any change in status (not necessarily just a successor firm), the appointment could be appropriately interpreted as valid'.

This is out of touch with the real world.

Testators are concerned with issues of family politics, independence, or the certainty of an executor (in the form of the firm) definitely being identifiable, rather than the potential liability of an executor and limitations on this.

Moreover, in the real world, the differences in liability are unlikely to be an issue for anyone other than the super rich.

The indemnity provisions are no less stringent on an LLP than on a partnership and all the usual judicial remedies for breach of contract, negligence and so on, still exist.

Perhaps naively, one might assume that the Probate Registry would be keen to uphold wills with such appointments, to honour testators' wishes as clearly expressed on the face of the will.

A reasonable interpretation would be that the LLP is 'the firm which has succeeded to', and to place on those seeking to dispute any such appointment the burden of proof that the testator would not have appointed the firm had he appreciated the remote possibility of a reduction in liability.

The registry's narrow view clearly avoids the intention of many testators, and will create vast numbers of applications for letters of administration with the will, as professional executor appointments fail.

The burden of administration will rest with those whom the testator had been at pains to protect, or at pains to exclude.

Consider the numbers of wills held in strong rooms, and how many of those contain appointments of the partners in the firm.

The registrars helpfully suggest that such testators make codicils to deal with the problem.

Good luck to all those who will need to trace and contact up to 80 years of clients to explain the situation, offer free-of-charge codicils, and hope that in the interim their clients' capacity has not deserted them.

Or must we hope for a legislative remedy - if parliamentary time can be found? I, for one, won't be holding my breath.

Tim Addinell is a partner at Norwich-based law firm Steeles