Examination Timing: 00H02M58S
A firm of solicitors is acting on behalf of the executors of a will. The administration of the estate will be completed shortly and the executors have asked the firm to pay the legacies due under the will. As a separate matter, the firm also acts for one of the beneficiaries of the will in connection with the beneficiary’s purchase of a property. The beneficiary is entitled to a legacy of £20,000 from the will. The beneficiary gives written instructions to the firm to use this £20,000 legacy to repay the £2,000 the firm has already incurred in surveyor’s fees and searches (for which the firm has billed the beneficiary) and retain the balance of £18,000 and use it as part of the purchase price.
Which of the following statements best explains the action the firm should take?
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Your selected option: D
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According to the Solicitors Regulation Authority (SRA) Accounts Rules, solicitors must ensure that client money is properly handled and accounted for. The firm can transfer the £20,000 legacy from the executors’ client account ledger to the beneficiary’s client account ledger. From there, the firm can transfer £2,000 to the firm’s business bank account to cover the billed surveyor’s fees and searches, as the beneficiary has provided written instructions to do so. The remaining £18,000 can be retained in the beneficiary’s client account to be used as part of the purchase price for the property.
Key Point: Solicitors must follow client instructions and ensure proper handling of client funds in compliance with the SRA Accounts Rules. Written instructions from the client allow for the transfer of funds between accounts to settle fees and retain balances for future transactions.
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