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Banks upbraided yet again - this time for will writing services

Four high street banks are under pressure to improve their will writing and executor services over concerns that they are not clearly explaining the costs to customers. 

 

‘While the costs for preparing a will can be relatively modest, the costs for a professional executor to administer an estate can be high and vary considerably. For an average estate, consumers can pay between £3,000 and £9,000. Failing to shop around for executor services could be costing UK consumers around £40 million a year,’ the OFT said.

The OFT has previously worked closely with the Solicitors Regulation Authority (SRA), which regulates more than 120,000 solicitors in England and Wales. It led to the introduction in June 2010 of new guidance on will-writing and executor services. The SRA has also adopted the three key principles to which the banks are now being asked to adhere.

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16 comments so far. Why not have your say?

Richard Bray

Feb 25, 2011 at 10:14

The BBC Panorama programme last year highlighted this exact problem with many solicitors and Will writing companies, but for some reason didn’t mention the banks services. Well done the OFT. In the majority of cases family and friends are the best people to appoint as executors. The banks just want the lucrative executor and probate services. The majority of Wills shouldn’t cost the earth, but I wouldn’t suggest a ‘do-it-yourself’ kit because, as with anything legal, the devil is in the detail. There are some excellent online Will companies which offer the best value and service.

Read more: http://www.ifaonline.co.uk/ifaonline/news/2028402/banks-agree-improve-writing-services#ixzz1ExqL9QFZ

IFA Online - News, blogs and analysis for IFAs. Visit the website now.

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ANDREW ROBINSON

Feb 25, 2011 at 12:39

I would like to point out, as a solicitor who writes wills and administers estates, that solicitors are not allowed to rip clients off. To do so is a matter of professional misconduct, and will result in action from the SRA (and quite rightly so). I am aslo a member of the Society of Trust and Estate Practitioners, who are respectable and responsible professionals who have attained proper standards and seek to do the best for their clients whilst receiving a fair reward for doing so.

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Richard Bray

Feb 25, 2011 at 12:55

Andrew, my point was directed at generic Will writing companies and not solicitors, so apologies. STEP is an outstanding organisation and it would be great if all Will writers belonged to it.

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Hotrod

Feb 25, 2011 at 13:46

I no faith whatsoever in solicitors, banks, or so called professonal will writing companies. I tried all three, but fortunately for my beneficiaries. I refused to sign, and returned their drafts.

My express wishes were completely ignored. They all wrote a will which would make my simple requests complicated so that they could milk my estate for all that it was worth. They also included a clause which stated:

I direct that my trustees may exercise the power of appropriation conferred under section 41 of the Administration of Estates Act 1925 WITHOUT obtaining any of the consents required under that section.

The worst example was the suggestion that nothing should be distributed immediately following probate, but instead everything should be put into trust, until the youngest child of any of the beneficiaries at the time of my death reached the age of twentyone and that the trustees should have carte blanche powers to do as they please with my assets in the meantime.

They tried to baffle me with legal jargon and iheritance tax liability, when in fact, unless someone in my family wins the lottery, none of us are likely to be eligible for IHT!

I bought a will writing kit, which came in the form of a CD. It seems quite adequate for my needs as I intend to leave my affairs uncomplicated, and my first consideration is to avoid ambiguity and dispute, which takes precedence over tax implications.

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Martin Drew

Feb 25, 2011 at 14:13

Years ago when my father died my mother, with the unpaid help and advice of her old style bank manager sorted his estate out herself. Later, when her father died leaving a quite complicated estate, she did that herself. Thus it was that when she died I thought I would sort out her estate and got excellent advice from the tax office in Nottingham who help with inheritance tax problems. In fact they alerted me to a loophole I wasn't aware of that saved about £8,000 in inheritance tax. To be honest for any estate that is just a home and few hundred thousand of savings in shares and deposit accounts I think people are mad not to do it themselves.

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Tim Drewitt

Feb 25, 2011 at 23:55

Thanks to Mr Andrew Robinson for standing up for the professional. I am one myself and - believe it or not - the interest of my clients comes first. But tell that to a graduate from a business school and they think you are mad.

I would not let a bank write my will for me - they would leave my estate to themselves!

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Maverick

Feb 25, 2011 at 23:55

Hotrod - I had to clear up the mess when an aunt who'd bought a DIY will kit in WH Smiths failed to execute it properly - this involved tracing both the witnesses (fortunately they were still alive!) and getting them to swear affidavits. Do it yourself if you like, but find a friendly solicitor to check it before you put it in the bottom drawer of your desk and forget all about it.

One vast problem with banks acting as executors is that they will absolutely refuse to exercise any discretion. Your son or daughter may need an advance to pay university fees, but the bank may just say no.

Don't do it - appoint two people from your generation to act as your executors - spouse if you like, but remember how many divorces turn acrimonious. Executors who didn't like you don't make for easy administration of your estate . . . . .

Oh, and I take it you've looked up Section 41 of the Administration of Estates Act 1925? If you have 4 children and 4 buy-to-let properties, it enables your executors to give each child a property without selling it and giving the child the cash. I used to put that clause in all the wills I drafted, though I used to explain what it meant.

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Hotrod

Feb 26, 2011 at 10:21

@Maverick

You make some very good points, but you also make some poor assumptions.

e.g. A will is supposed to be individual an represent the persons express wishes in relation to their particular circumstances at the time of death.

That is the problem which I have encountered with the will writing profession. They have not shown any interest in enquiring exactly what my circumstances are likely to be or my relationships with my beneficiaries.

For the record I do not have 4 buy-to-let properties, and I do not have 4 children. In my case there would be an odd number of properties (1) and an odd number of beneficiaries all of whom have their unique lifestyles and financial priorities. I foresee the potential for dispute, because one beneficiary may want to acquire the property to live in it. Another would want to let it and receive the rental income and a third would want to sell it and receive their share in full. It would be the same with my goods and chattels. I'm not sure that they would agree to share them amicably and fairly.

For these reasons I wish to stipulate that the first priority of my executors is to arrange the sale of everything I leave at their earliest convenience. If not convenient or timely, then to be sold at auction.

But you see; that's too simple. The legal profession cannot make a lot of money out of that. They like wills that are ambiquous and will involve them in lots of legal arguments which take years to sort out.

Oh and BTW I have no intention of writing a will and stuffing it in the bottom drawer and forgetting it. All my legal documents are kept in a secure fire proof safe.

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whitegates

Feb 27, 2011 at 09:55

Extraordinary that banks, who can't even do banking very well, should be allowed to stick their clammy hands into the preparation of wills and administration of deceaseds' estates. As a non legal professional I fail to understand why if you want a will prepared one doesn't go to a solicitor - what expertise does a bank have? In the same vein, if my pet is ill I consult a vet not my local branch of Boots.

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Maverick

Feb 27, 2011 at 10:07

Whitegates - I agree entirely, but I think the correct analogy is that if your pet is ill you don't consult a butcher . . . . !!

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Maverick

Feb 27, 2011 at 10:26

Hotrod - There's no magic in writing wills. If you want your executors to sell everything in your estate and distribute the proceeds then you are perfectly able to say so. Provided you do that in clear and unambiguous words no solicitor should be able to argue about it.

However, all law students are taught about the DIY will writer who confused the terms "realty" and "personal property" and who ended up giving his houses to the Cats' Home and his books and furniture to his many children. The Court ruled that the will was clear and in the absence of any external evidence (and there wasn't any) it had to stand.

You can put your will in the safest place in the world, but if you've drafted it wrong your executors may wish you'd never made it. My point was that a DIY will needs checking by someone with a bit of legal experience before you put it away.

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Neil Liversidge

Feb 28, 2011 at 11:16

Hotrod - you sound like the type of client we refuse to deal with, i.e. the type that trusts nobody, who knows the price of everything and the value of nothing. I had somebody like you in to see me a couple of years back. He had a right old rant about how a solicitor had tried to 'rip him off' by wanting £50 for a 'simple will', so he'd written his own. He'd brought it with him to show me how clever he was and how he didn't need professionals, though he still spent 3 hours picking my brains for free about investments and inheritance tax. Unfortunately he'd not thought to have his DIY will witnessed and nor had he dated it. It wasn't an entirely unproductive 3 hours I spent with him however; it made me a lot more ruthless as to what free time I allow those seeking to become my clients. Now when I realise I'm dealing with a pratt I show him the door double-quick.

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Hotrod

Feb 28, 2011 at 14:03

@ Neil Liversidge

Your comments are understandable and accepted for the purpose of this debate. However I don't think they apply to me. I started out with the assumption that solicitors, bank managers, and will writers were more intelligent and learned than I, and since they are bound by professional and ethical codes of practice, it would be wise for me to consult them, with the view to entrusting them with my legal and financial affairs.

However subsequent personal experience has forced me to take a more circumspect and cynical view. Perhaps the legal and banking professions can make comments of this forum which would restore my confidence.

Approximately three years ago I approached a local firm of solicitors for the purpose of writing my will. They stated that they did not charge for will writing, but that they would apply commision and expenses when the will was executed. I was asked to make a short list of my possessions, and directions as to what I wished to happen to them upon my death. In my list of directions I unequivocally stated that I did NOT wish bestow any gifts of property,goods or chattels. Instead, I wished to instruct my executors to sell and convert into cash at their earliest convenience ALL that I owned and was rightfully mine and to distribute the residue to my beneficiaries. No objections were made to my instructions at the time of consultation. However when I received the draft, this request had been ignored and instead the will had been drawn up in the form of a trust. There were no instructions to sell anything. On the contrary the will gave the executors the power to let the property for a maximum of twentyone years. When I questioned this; I was told to ignore that clause because it was only there to give the executors the widest possible powers. I couldn't accept this. The will writer had written a will which he/she wanted me to agree to. It wasn't my will at all. I refused to accept it at the draft stage.

My second and third encounters were even worse. I approached a bank with the view to tranferring my instant access cash ISA into a fixed rate fixed term ISA bond. The bank also advertised that they offered a free, will writing service to their customers.

My first consultation was with the bank manager to set up the bond. Who stated that she would arrange the transfer. To cut a long and tortuous story short. They transfer had still not occurred some two months later, despite me writing several letters and making phone calls to call centres all over the world. Each bank blamed the other for the delay and eventually admitted that they did not know what had happened to my money, and advised me to sort it out at branch level. This I did by demanding a cheque for the full ammount of my savings regardless of loss of tax status.

As regards the writing of the will: It transpired that the bank did not employ professional will writers themselves, but referred their customers to a company who engaged in that kind of work. On reading the small print of documents provided at the consultation I realised that will writing was just a front, they were in fact an estates management company.

Draft document they prepared included all of the above plus the power to buy additional property with the money in my bank accounts.

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Hotrod

Feb 28, 2011 at 14:25

To all who read my contributions. Far from considering myself smart and clever. I feel isolated and vulnerable in a dog eat dog society. I read what erudite, informed, and lucid writers have to say in the hope I can educate myself, but in this fast moving world it becomes more and more difficult to keep up. In addition to Citywire I read American websites. Problems over there are far larger, but they do have some well informed critics who are not affraid to speek out.

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Maverick

Feb 28, 2011 at 14:59

Hotrod - The default arrangement for a will is what is called a "trust for sale" - in other words, the executors have to sell your assets. The clause allowing the executors to delay is to avoid situations where (e.g.) the stock market is falling through the floor and it would not be in anyone's interests to sell your investments at that particular moment.

Neil Liversidge's story about the DIY will which was not witnessed or dated is exactly what I meant about getting the DIY will checked before you put it in your safe. Yes, of course the solicitor will charge you for the service. This is not quite like changing the washer on a tap - if the drip stops, you've done it right - it's more like putting in a new fuse-box. You can do it yourself, but it is dangerous, and it should be checked afterwards by someone who is qualified.

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Neil Liversidge

Feb 28, 2011 at 16:35

Hotrod - the lessons to learn here are a) that nothing worth having (in terms of professional services) is 'free' and b) that it pays to take advice provided you've a competent and trustworthy adviser. From the brief outline you've provided I think you would be ill-advised to require a forced sale. Why not make your beneficiaries your executor/trustees and let htem have discretion over how they handle the estate? They can then pull in professional asistance if they want it and after getting competitive quotes. Just don't agree up front to anything that puts a high-charging trust company in place or that gives anyone else carte blanche to charge the earth.

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