Editor’s foreword

The Draft Third Money Laundering Directive (3MLD) raises concerns that will be little eased by the intended speed of its implementation. I give it a 55 per cent ‘non’, a 63 per cent ‘ney’ and a 100 per cent ‘no’. Indeed, why are we lumbering ourselves with further Euro-bureau nonsense?

The Directive clearly targets trustee service providers for additional regulation, but, as Martyn Frost explains in his comprehensive analysis of the Directive (page 9 onwards) the European Commission has admitted that it has undertaken no research into the use of trusts in Europe. Nor has the UK government carried out research before agreeing to the Directive proposals affecting trusts. This is ridiculous.

Trusts inundate financial affairs in England and Wales, and Martyn argues such regulation stems more from ignorance and prejudice than an informed need for regulatory action. But what is new in European law?

Even worse, member states will be expected to implement the terms of 3MLD within 18 months. Considering that the Second Money Laundering Directive of 2001 still remains to be implemented in all member states, one might wonder, as does Martyn, exactly how such a speedy response will be achieved.

It surely cannot.

Also in this issue is part one of a two-part article looking at abuse of older and vulnerable people. Those professionals advising older clients are likely to encounter a suspected case of abuse at some point in their careers, but knowing how to identify and handle such a sensitive situation is a real challenge, however experienced the professional might be. To make things more difficult, cases of abuse can be particularly hard to recognise because victims may be reluctant to come forward due to embarrassment, fear or even language barriers.

Anne Edis, president of Solicitors for the Elderly, provides some practical guidance (page 18), however, that outlines how to identify cases of abuse and the steps professionals should take to manage a wide variety of abuse scenarios. It makes essential reading for those wanting to best protect their clients’ interests.

Another concern that has particularly hit the news of late is the mis-selling of financial products. Most recently, the spotlight has fallen on equity-release schemes, with the FSA claiming that more than 70 per cent of advisers are not gathering enough information about their customers before offering them advice on equity-release products. Mis-selling generally is also a concept covered by Peter Cherry in his article on split capital investment trusts (page 23).

In the investment atmosphere of the 1990s, split capital investment trusts were a straightforward and low-risk idea, but, when the bubble burst, some splits saw their values tumbling and investors were soon alleging that they were the victims of mis-selling. For a while, the splits debacle could have seemed like another case of the position of names in the Lloyd’s of London insurance market of the 1990s, where the commercial court was tied up with litigation for years. Peter Cherry convincingly argues, however, that better regulation by the FSA and an improved complaints system via the Financial Services Ombudsman has redressed some of the generic problems in the financial-services industry. It will be interesting to see what further steps are made to consolidate this progress. While not a great fan of the FSA and other such giants, if the Eurocrats took a little note, their attempts at regulation might prove more practically useful.

If you should have any suggestions or comments please feel free to contact me. If you sent e-mails recently and have received no reply feel free to re-send. You know how it is sometimes…

David Coldrick
Editor
david.coldrick@wrigleys.co.uk

Features

The search for beneficiaries... Free
Henry Pearson died in Stansted at the age of 53 with no will and no known relatives. We undertook research to trace the missing beneficiaries.

The EC’s Draft Third Money Laundering Directive: An attack on trusts and trustees? Free
Rushed legislation, regulations and bad law appear likely to make current ID regulations the least of readers’ problems. It will also be an expensive headache for clients. Martyn Frost, deputy chair of STEP and consultant in the trusts and estates department of Halliwells LLP, provides a welcome comprehensive analysis.

Split capital investment trusts: A case of déjà vu? Free
Many older clients and some trusts will have had portfolios containing split capital investment trusts. But, investment webs and debts brought some values tumbling down. Peter Cherry, a barrister at Chancery House Chambers, examines the legal issues of the debacle and contrasts it with other similar situations of a decade earlier. He addresses mis-selling as a concept and conflict-related issues, as well as how a quantum of loss might be assessed. He also considers why the position of the individual has much improved and how legal fees have been saved.

Tackling abuse: Recognising, preventing and dealing with the abuse of older and vulnerable people Free
Solicitors for the Elderly (SFE) recently published a ‘Strategy for recognising, preventing and dealing with the abuse of older and vulnerable people’ to help SFE members safeguard clients’ interests. Now its author, and president of SFE, Anne Edis, allows ECA to publish the guidance in a two-part article starting in this issue.

Assessing A-day: The impact of 6 April 2006 on death benefits Free
John Dunseath, an associate at Whitehall Financial Independent, provides an overview of death benefits available from pensions from 6 April 2006, otherwise known as A-day.

ECA course: Part 12 - Protecting the interests of older clients Free
David Coldrick, partner at Wrigleys Solicitors, begins this next part of his ECA series with an examination of capital disregards, providing an introduction to the complex area, before looking in more detail at disregards related to the care-home resident’s dwelling.

US cheating alien shareholders? Free
Damian Earley, director of probate services at Title Research, expresses concerns about the recovery of certain assets in the estates of non-US nationals. Many clients underestimate the difficulties ‘a few US shares’ might create for their heirs and legal advisers. He also examines the outrageous rules of escheatment.

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