There was a recent high court case of Soh Eng Beng (as executor and trustee of the Estate of Soh Kim Poo, deceased) v Soh Eng Koon. The executor and one of the beneficiaries brought their dispute to court in order to seek assistance from the judge to decide the exact meaning of an ambiguous clause. What interests me was the process in which the Will was drafted:
- Although the cover page of the Will shows that the Will was written by a particular law firm, it turns out that the lawyer in charge was not involved in the entire process. The person who drafted the Will was the lawyer’s secretary.
- The secretary took instructions, drafted the Will, made the necessary amendments and explained the contents of the Will in Hokkien to the testator.
- There was no attendance notes and hence no evidence of fact finding and analysis.
- The secretary made two mistakes: a spelling error in one of the beneficiary’s name and one ambiguous clause which was the focus of the dispute in court.
- The testator may not have understood English and relied on the Hokkien translation. If this was the case, the testator may have fully relied on the Will Writer professionalism to do the right thing.
This is a classic case of unqualified Will writers who lacked the skill and professionalism to conduct a thorough fact finding and analysis. The judge said, “Regrettably, it seems to us that, all too often nowadays, solicitors appear to consider the preparation of a will to be no more than a routine exercise in form filling. This is wrong.”
The problem of “form filling” and lack of professionalism is widespread. Although the majority of Singaporeans have never written their Wills, the few that I have seen wrote ambiguous Wills probably because their Will writers considered such exercise as mere form filling. Sometimes, the Wills’ contents do not contain ambigiouity but contain practical issues. One of the most classic case of practical problem is to bequeath assets to children who are still minors using a simple Will. None of my clients knew that minors are unable to inherit assets until they reach legal age. When I explained that the executor would become trustee for such cases, I discovered that none of them knew what were the exact roles and duties of a trustee. Apparently, they were not briefed on the meaning of “trustee” and what it really means to be trustee of minors’ assets.
To be fair, such problems in the Will writing industry are not unique in Singapore. In the United Kingdom, the Society of Trust and Estate Practitioners (STEP) revealed that the scale of the threat posed to the consumer from “cowboys” in the Will writing market is large. In a survey published just recently in August, STEP found 75% of STEP members encountered cases of incompetence or dishonesty in the Will writing market in the last 12 months. One example cited for malpractice included a company which approached young mothers in shopping malls charging them £12,000 up-front in executorship services only to go out of business soon after! Cases of malpractices in Will writing market are seldom reported in Singapore other than disputes in court. This is not because the industry is well disciplined but likely because the majority of the Singapore residents have not written their Wills!
This problem of mere “form filling” is also widespread in the financial industry. In most financial advisory relationship the following is normally what happens:
- While financial institutions market themselves to provide financial advisory and financial planning services, the adviser is often more competent in sales than financial planning. In other words, it is the salesman and NOT the true financial planner that meets the client. This is similar to having a secretary providing legal services.
- Very often, there is little fact finding and analysis. But these days, firms are getting their advisers to perform some form of fact finding. According to the Life Insurance Association statistics, 72% of the insurance sales were conducted through partial or full fact find. Yet, the average sum assured sold for regular premium life insurance continues to be a miserable $53,308! How long can a family last with such a low amount in insurance? Obviously, these fact findings were mere form filling exercises.
- Although most individuals these days are well educated, they still have to rely on professionals to assist them because financial products are getting quite complex. In other words, financial advisers have the responsibility to “interpret” and explain the benefits and risks of such financial products to their clients.
Regardless of whether it is writing a Will, retirement planning or insurance advice, the importance of the client seeking the assistance of a true professional cannot be underestimated. The true professional is one who is willing to conduct a thorough fact finding, analyse clients’ situation and provide suitable recommendations. To do this can take a large amount of time and effort. Such a thorough process is never available unless one is wiling to pay a fee for it. The analogy is medical diagnosis. Medical diagnosis refers to the process of attempting to determine the identity of a possible disease or disorder and to reach an opinion. This is done through medication examinations, reading medical records, diagnostic tests and so on. Such process requires both time and money. It is morally and legally wrong for any medical professional to prescribe medications or conduct surgeries without any prior medical diagnosis and due diligence. Yet, in the financial industry it is the norm to recommend products even without understanding the clients’ needs. Imagine the moral and financial hazard involved. Since clients do not pay unless products are bought, such a phenomenon of selling financial products without any due diligence is not surprising.
Similarly, many Will writers are simply form fillers and instructions takers. How can a Will be drafted without understanding the testator’s needs? Perhaps these Will writers felt that it was intrusive to ask too many questions. But the real reason is likely to do with money than anything else. It takes about nearly 20 hours to fully understand a client’s needs through a thorough fact find process. Assuming there are 160 working hours in a month, the Will writer can only accommodate 8 cases per month. Given that a simple Will costs an average of $200, the revenue is only $1600 per month. That is why in the Will writing industry there is little or no fact find. The onus is on the testator (client) to determine for himself or herself whether the Will drafted is suitable or not.
Whether it is estate planning or financial advisory, it is obvious that professionals should and must go beyond mere form filling exercises. Consumers should demand greater professionalism and this can only happen if professionals can be assured and confident of earning a decent living even if it means spending many hours diligently on the case.
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