Indemnity forms can be a useful tool for solicitors trying to reduce the risk to their firm when distributing an estate, but they can have limitations. With the current economic situation, the parties signing the indemnities may no longer have the funds if there is a claim on the estate and the indemnities are called upon and the money asked to be repaid.
Kate Thorp, Manager of DUAL Asset’s Estate & Inheritance team, said:
“Some beneficiaries and charities are now refusing to sign them. The number of these enquiries we are seeing are definitely on the increase. The reasons for the parties not wanting to sign can vary greatly.
Some charities want to be able to spend their inheritance, perhaps to support new initiatives or carry out building works and they do not want to be concerned about having to pay this money back.
For individual beneficiaries, the reasons can be because they want to invest their inheritance and there can be severe penalties for withdrawing money. They may just want to pass on their inheritance to their own children for tax mitigation purposes.
Or they simply need the money to live, with the cost of living crisis affecting many people.”
How can insurance help? DUAL Asset can look at providing a policy to protect the executors/administrators, to replace the indemnity, which would have been signed by the beneficiary or charity. Cover can also be provided where a charity has already signed an indemnity and then the policy can sit behind this, in case the indemnity is called upon. The policy would then step in and pay, instead of the charity.
DUAL Asset also has a Comprehensive Executor & Inheritance Policy. This policy covers both the executors/administrators and all the beneficiaries including charities. This means indemnity forms may no longer be needed, as the estate is protected by insurance for the most common estate claims, such as the will being challenged, a missing beneficiary coming forward, a will being located and Inheritance Act claims.
For more information, or to discuss a particular case, please contact Kate Thorp at Dual Asset on 07519 129136 or email kthorp@dualgroup.com.
This article was submitted to be published by DUAL Asset as part of their advertising agreement with Today’s Wills and Probate. The views expressed in this article are those of the submitter and not those of Today’s Wills and Probate.
