WILLS & PROBATE: Banks Cash In on Wills
Do you or your loved ones have a Will prepared by a bank? You may want to think about updating your Will after reading this blog, as you may be facing thousands of pounds in legal fees.
In the late 1990’s and early 2000’s banks were offering Wills for very little, and in some cases, for nothing with certain products. Seems like such a fantastic idea…but is it? We don’t think so.
The small print of such wills give the banks the right to appoint themselves as executors and charge up to 2.5% in fees for dealing with the administration of the estate. Some banks are charging up to 4.5% of the estate value! Also, there may be are other hidden charges. These percentages certainly don’t seem high but they can very quickly add up to thousands of pounds, as we will see.
Peter found out the true cost of one these Wills when his mother, Marjorie aged 97, sadly passed away. Marjorie’s late husband was a former NatWest bank manager and had arranged her Will through the bank.
Marjorie’s estate was straightforward, she left her £400,000 estate to her two sons. NatWest’s fee for administering the estate was £11,500, much to Peter’s shock. This included a fee of £1,500 plus 2.5% of the estate value up to £15,000. In comparison, another firm quoted £4,000 for dealing with the estate. That’s £7,500 cheaper than the bank!
You can read the full article by clicking here.
Barbara had her Will prepared by NatWest some ten years ago. After reading the above article Barbara’s daughter, Debbie checked the terms of her mother’s Will. In the small print she discovered, that NatWest reserve the right to act as executors and deal with the administration of her mother’s estate. NatWest’s fee for acting as executors will be a £1,500 administration fee and 2.5% of the estate value plus VAT. That equates to £7,000 plus VAT for Barbara’s £220,000 estate which is excessive.
Sheena’s aunt passed away in 2008 leaving her estate to her eight nieces and nephews. Her estate was charged a shocking £32,000 by Lloyds bank, but it did not end there. Martha’s will was challenged and the bank said they were unable to help because their fee did not cover legal advice. Consequently, the family had to instruct solicitors and pay a further £18,000 in fees.
You can read the full article with many more stories by clicking here.
These are just a few stories of banks charging excessive fees for dealing with an estate. We are certain that many more of you have suffered as a result of these excessive charges. In fact, it is estimated that 1.5million wills have been written by banks over the last 20 years. As a result, the banks are in for an estimated £9billion windfall based on an average fee of 2%.
It is also worth noting that whilst you can request the bank to renounce as executors, they don’t have to. Furthermore, they may charge you to renounce.
Take action now
Seems like a good idea to update your Will now before it’s too late. And, save your loved ones the hassle later, when you are no longer around. Removing the bank as executors will save you thousands of pounds. As a result, you will be able to pass on thousands of pounds more to your heirs.
For those of you that have lost a loved one, Clarence Trustees offers a fixed fee Probate service. What we quote is what the estate will pay, unless there is more work than originally anticipated. In which case we will liaise with you to agree a new fee. To find out more contact us today.
Find out more about our Will Writing service and Fixed Fee Probate Service
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