The latest controversy to hit the UK banking sector has underlined the importance of seeking independent expert advice when writing a will, a Yorkshire law firm Milners has warned.
As grieving relatives are now finding out to their cost in ever-increasing numbers, the small print of wills prepared by many High Street banks can contain a financial shock.
Their loaded terms and conditions allow them the power to appoint themselves as the executor of a loved one’s estate – and receive a significant share of it after their death.
“The fees charged by the banks from beyond the grave can take families by surprise, ” said wills, trusts and probate lawyer Jessica Savage.
“From my experience, many families are not aware what a loved one has signed up to, nor appreciate the level of fees – often as high as 2.5 per cent – that will be levied.
“For example, this means that a family that inherits £500,000 – with soaring house prices this is not uncommon – could see as much as £12,500 plus VAT swallowed up by the banks as part of the will-writing agreement.”
Will-writing by banks is being billed as the latest financial scandal. As many as 1.5m people have signed up for the service, which is often provided cheaply or even free to clients by the banks back.
Many of the wills containing the high fees were signed in the 1990s and early 2000s – and the full extent of the banks’ charges is only becoming known now.
It means that the banks assume responsibility for wrapping up the deceased’s estate and dealing with everything from property sales to inheritance tax.
Jessica added: “This once again underlines the importance of casting a forensic eye over the contents of a will before signing it.
“The agreement to appoint the bank as executor is often hidden somewhere deep in all the correspondence.
“Banks should do more to explain their role and their fees more clearly, so there is informed consent to signing the will.
“As well as appointing themselves as executor without formal instruction, the other concern is that many bank probate teams are often not run by solicitors.
“The same goes for the actual wills themselves – rarely will they be written by an actual solicitor but, worryingly, by people without legal qualifications.
“It’s important when writing a will that you get the best advice from someone who is qualified. They will ensure your dying wishes about your inheritance – however complex – are met, and in the most financially beneficial way.”