Hidden charges in Wills drafted by banks
What’s all the fuss about?
Many people have had Wills drawn up by their banks for a small sum, or perhaps for free. It is not unusual for banks to offer legal services, and they still do.
The key issue, as reported in the Daily Mail is that banks have recommended that they should be named as the Executors in these Wills. They have agreed to take a percentage of the estate as payment for their services.
Given the recent period of economic growth, especially with house prices rising again, their bills can be disproportionately large for the service they provide.
Read the Daily Mail Online article ‘Now The Banks Cash in on Wills’
Find out more below – and contact us if any of the issues in the article concern you. We offer a free review of your Will, to give you peace of mind regarding your own position.
What is an Executor?
The Executor of your Will is the person (or people – it is advisable to have more than one executor) who you have asked to collect all your assets, establish all your liabilities, complete the HMRC and Probate paperwork for your Estate and will pay inheritance tax etc. when you die. They also have legal responsibility for keeping account of all money paid out in accordance with your Will, and maintaining these records for a period of time.
You can find out more about the role of Executor in our Guide to the Administration of an Estate.
Can anyone be an Executor?
Yes! That’s the point. You can choose any adult with capacity, preferably resident in the same country as you, to be your Executor. It is advisable to appoint two, in case one is unable to act when the time comes. The Executor, often a family member, can then choose to instruct a professional to help with some or all of the process.
For example, we are often instructed to complete the legal paperwork, so that the Executor is assured that the process is managed by someone with experience.
We would probably need professional help anyway. Why not leave the bank as Executor?
When a professional or corporate body, such as a bank, is appointed as the Executor, a fixed charge will apply regardless of the complexity of the estate. This is usually a percentage of the overall value of the estate and can be as much as 2.5%. In acting for an estate worth £500,000.00, the bank may charge up to £12,500.00.
When an Executor instructs us to act in an estate, we agree a fee at the outset based on the complexity of the work involved. To deal with all the aspects of administering an estate worth £500,000.00, our fees are likely to be around £3,000.00.
It is important to note that the Executor of an estate may not require our services to support every aspect of their role. Therefore, the cost of our assistance may be even lower. The cost of a bank acting as Executor is fixed, even if the family could do the role themselves.
I have a professional Executor named in my Will. What should I do?
Book a free appointment with us, either online or by telephone. Bring your Will for us to look at. We will explain to you the costs involved in using that professional as your Executor and discuss your options. You may choose to make a new Will, naming different Executors, and you can arrange to do that with us.
My loved one has passed away and I think their Executor is a professional. What should I do?
You should contact us immediately, before the Executor does anything. It is possible to ask them to stand down, and for the next of kin to be appointed to act instead. However, it is very difficult to do this if the professional Executor has already done some work on administering the Estate.