Banks called to account over will-writing concerns

by Property118.com News Team

17:35 PM, 23rd February 2011
About 10 years ago

Banks called to account over will-writing concerns

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Banks called to account over will-writing concerns
Picture of Will and Testament

Banks called to account

The big four banks are revamping their will-writing services after concerns that customers appointing professional executors did not understand the costs and consequences of their decisions.

Many bank wills include instructions to appoint the bank as an executor, which leads to the estate paying out between £3,000 and £9,000 in costs for work that someone in the family could undertake for free.

After intervention by the Office of Fair Trading, banks are explaining to customers that they do not need to appoint them as a professional executor if they opt for their will-writing services.

Barclays Bank, HSBC, Lloyds Banking Group and RBS Group have all voluntarily agreed to review and, where necessary, improve the way they sell will-writing and executor services.

The OFT approached the banks last year as part of a wider initiative to improve the will-writing market for customers and their beneficiaries, following concerns that some consumers were appointing professional executors without fully understanding the likely costs and the alternative options.

The banks have agreed three key principles to help customers make informed decisions about their wills:

1)  Consumers making a will should not be led to believe that appointing a professional executor is essential or the norm.

2)  Consumers should not be encouraged to appoint a professional executor unless it is clearly in their best interests.

3) Providers should understand the options around executor appointments and be aware of the likely basis of charging for the professional executor service.

The OFT’s David Stallibrass said: “The wrong decision when appointing executors could mean a potentially expensive professional service is chosen, when a family member or friend may be quite capable of handling the task either alone or with professional support.

“We are pleased that each of the banks has agreed to review its selling practices and marketing literature to ensure customers are getting the information they need to make informed choices.”

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Comments

Howard Reuben CeMap CeRER

8:58 AM, 13th July 2013
About 7 years ago

The banks are not the only one's imposing themselves as Executors (in their 'free Will' service), many will writing Firms and solicitors do too.

I was discussing an estate planning strategy with a Client yesterday and he told me about another Firm he was going to use ... until they told him how they will name themselves as Executors and what their charge is for the 'benefit' of using them.

Since 1995, when we first launched our Will Writing and Estate Planning service, we have never been named as Executors because a) we don't need to be, b) any professional Firm will offer a comprehensive service to help the Client select their own Executors (and Trustees etc) and c) as an added value service the Firm should also meet / discuss the processes and regulations directly with the Executors / Trustees so they are fully aware of their roles and responsibilities.

How many banks or will writing Firms that you know about have actually ever offered this to you and your family?

It's not hard to do it this way and so my suggestions are;

1) write or update your Will and estate planning strategy NOW, or at least 'properly' review what you have in place every 2 years or so

2) ensure your Executors actually know what they need to know (ask them, what are the first 3 things that they need to do to ensure they keep the Will valid and that your estate is administered as you want it to be ... that'll usually show that the vast majority of named Executors will be 'honoured' to have been chosen but don't actually know what to do and in what order).

3) if you have become married since your last Will was written, check it! Was it written in contemplation of marriage? If not, it's now invalid. Write a new one now.

4) have you got young children (under age 18)? Are they named in your Will? Importantly - have you specifically named Guardians? If not ...... speak to a Will Writer to get this attended to asap. There are reasons for this which you need to know about.

5) and of course, the big one ... for property investors who fall in to the governments tax raid on death, IHT levels should also be addressed/mitigated regularly too.

The cost of even the most expensive Will and Trusts 'package' is still usually a minute % of the estate and potential IHT bill. Most people, by the way, don't have such complex estates that an expensive structure is required anyway - and the word 'expensive' is relative too.

In real terms, it costs little or nothing to review an estate, and it certainly doesn't have to be done using an expensive 'free will' with a bank.


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