The benefits of Power of Attorney (PoA) are well-documented. Its limitations and risks perhaps less so and, unfortunately, meaningful solutions are not readily discussed.
Most negative perceptions associated with PoA - that it is open to abuse and misuse - only apply in a small minority of cases. By far the bigger problem is inadvertent mismanagement.
Why? Typically, it is because the knowledge and skills of attorneys vary enormously and can shift over time. Mismanagement can happen when the attorney has misunderstood or underestimated their responsibilities, or when their ability to carry out the wishes of the granter has altered due to changed circumstances.
In her recently published book Power of Attorney, the former Public Guardian in Scotland, Sandra McDonald, sums up the position very succinctly:
The vast majority of attorneys bend over backwards to do a sterling job but they may, innocently, overlook something which leads to a loss of money that you would have been due. There are a small number of attorneys who become tempted by the money available to them and use it for their own purposes.
One way to mitigate against uncertainty in relation to estates or financial affairs is to offer protection through bonds or other insurance products.
Savendale, a leading provider of insurance services to the Scottish private client solicitors sector, believes that a £50 compulsory Power of Attorney bond is a solution that merits further consideration.
Ian Burrell, Savendale Managing Director, joined forces with bond underwriting experts CLS Property Insight (CLS PI) last year to create Savendale powered by CLS PI. With a focus on private client solicitors and their needs, Ian and the CLS PI underwriting team have rapidly become the voice of authority on product developments that would benefit the management of Scottish estates.
The company has established a presence in the area of assisting Adults With Incapacity (AWI), highlighted by Ian’s recent participation in the Law Society of Scotland’s AWI, Guardianship and Elder Client Conference (alongside CLS PI’s Underwriting Director, Roy Partington) and the Scottish Paralegal Association Conference.
It is also an approved provider of Guardianship Bonds - which fulfil the same function as Power of Attorney - by the Office of the Public Guardian.
Ian understands that there can be valid objections to a PoA bond. However, he believes they are outweighed by the fact that appointing PoA is generally based on two concepts which are prone to unforeseen errors of judgement - firstly trust and, secondly, assuming an understanding of future events.
What’s the one thing that matters most to you as a busy solicitors firm? Saving time…. every time!
Savendale Insurance Services’ Bonds of Caution - underwritten by CLS Property Insight - enable you to secure the assets and estates of your clients in the most straightforward way, with a simple application process (no unnecessary questions!) and a quick turnaround time.
Here, CLS PI’s Underwriting Manager Chantelle Wren explains how keeping it simple pays off for you as a legal professional.
“We make ordering as simple as possible. Guardianship bonds can be processed fully online - clients can log on to our platform, insert some information and get a fully sold bond within seconds.
“For Executry Bonds, most applications come in via email. Although this process is not fully online yet, clients still favour us because of how quickly we handle the process - not just in the quote but the end-to-end service.
“We only ask for information that we need. There is no box ticking or added questions because it has no benefit to our clients and we are not trying to upsell other products.
“We are helpful on the other end of the phone. We deal with things much faster at our end and the clients get their bonds faster. We respond to emails within 48 hours and we can get bonds to clients within a week.
“Even now, when it’s not possible to attend events or speak to solicitors in person, clients have access to our calendar- if they want to book an appointment they can arrange an online session and meet ‘face to face’ in a video call.
“Ian Burrell, Savendale’s managing director, has specialist knowledge of the Scottish solicitors market which is almost exclusively our client base for these products.
“Our clients feel very comfortable knowing that they are getting the fastest service available from a very experienced bonds provider. We issue our bonds with confidence - the financial strength rating of our insurers (Great Lakes Insurance SE) is particularly good.”
Don’t be fooled by the fact Savendale Insurance Services is a new name in the Bonds of Caution market - it’s already out in front in terms of knowledge and experience. How do you know? It’s all in the numbers.
Savendale’s Bonds of Caution are issued in partnership with industry-leading underwriters CLS Property Insight, whose years of specific expertise and world-class NPS score of 81 add up to a guarantee of high-quality customer service.
Adding to the sum, the AA- financial strength rating of CLS PI’s insurers, Great Lakes Insurance SE (a wholly owned subsidiary of the Munich RE Group), can offer you total peace of mind for your firm and your clients. When you’re securing their assets, that’s everything.
There is another important part of the equation, too, although Savendale’s Managing Director Ian Burrell might not care to be reminded of the next impressive number.
Ian has over 40 years of experience in insurance services and a decade in the private client solicitors’ sector, making him uniquely placed to guide you through your transactions with a maximum degree of confidence.
Here, CLS PI’s Marketing Manager Karen Gannon explains some of the details behind these figures, and what they mean to Private Client solicitors using their services.
“Savendale is a new name but CLS has always worked with Ian on these products. Customers have always dealt with Ian and he’s managed the relationship.
“Backing Ian up, we have a dedicated Client Services team to help customers before, during and after the process.
“Our NPS score is a customer loyalty and satisfaction metric. We react quickly to feedback to shape our products and services in the future, to fit our clients’ needs and demands.
“Clients can pick up the phone to us at any time.
“Our capacity on Executry Bonds is £10m, one of the highest limits on the market. We can go higher and provide bespoke solutions for large cases. All of this is enabled by being insured by Munich Re and its AA- rating.
“So while Savendale might be a new name, it’s backed by CPS PI’s expertise in underwriting and the security of Munich RE.”
In the hugely uncertain times of a global pandemic, being able to insure the assets of your clients with a provider that will get things done quickly and reliably is more important than ever.
Savendale’s steady hand inspires confidence when your ways of operating as a legal professional have changed so substantially - and are potentially more open to risk.
Gillian Campbell, a partner at Shepherd and Wedderburn LLP, explains the importance of being able to insure clients’ assets, particularly during the COVID-19 pandemic.
“Throughout the pandemic period, we have been really busy administering executry estates. Unfortunately, some of these deaths have been COVID-19 related.
“One of the insurance products we find ourselves needing from time to time is an indemnity for lost share certificates. Because of COVID-19 restrictions, where a single person has died, the executors and families may find it difficult to search the person’s house for share certificates and documentation of that kind. This makes it more likely that certificates are not found.
"Other intestate products can form a part of the business we do as private client solicitors, but there are particular requirements we have at the moment.
"Bonds of Caution, a form of financial guarantee that is designed to protect beneficiaries from incorrect distribution of the estate by the executors, are usually required in Scotland before permission is granted to administer a deceased’s estate.
“When you consider the potential risk associated with intestate products in the current climate, it is important that law firms have ready access to insurance products such as Bonds of Caution."