I was alarmed when I read a recent article in the Daily Mail newspaper about the number of people who have done a bank Will. As in let their bank draft their Will on their behalf.
Apparently in the 90s and early 2000s, high street banks made a big push for sales of their Wills. Remember this was a time when banks were still trusted and seen as an authority when it came to all things related to money.
The Wills were fairly low cost at around £100-£150 and included secure storage inside the bank’s vault. Many people were already storing their house deeds with the bank so why not keep everything together?
The problem with a bank Will
Whilst there are plenty of reasons why you should make a Will and I encourage all my clients to have one, I was very concerned as I read more of the article.
Where the banks were very sneaky in drafting these Wills was where they inserted themselves as Executors.
An Executor is the person or people who will administer your estate once you have died. They will use your estate to pay off any debts you may have, pay any Inheritance Tax you owe and then distribute your estate to your beneficiaries.
What’s the problem with this you may ask? Well, as inserting themselves as Executors, the bank also reserved the right to charge fees for this service.
The fees are usually a fixed administration fee and a percentage of your estate value. This can run into the thousands depending on the size of your estate!
Take NatWest for example. According to the Daily Mail article, they charge a £1,500 administration fee and 2.5% of your estate. On an estate worth £500,000 that’s £12,500 plus £1,500!
My grandparents contacted me after reading the same article. They were concerned as they had done their Wills through their bank.
After checking their Wills I saw in black and white that the bank had in fact inserted themselves as Executors and reserved the right to charge a fee for this service.
Now, of course the banks will say that people signed up to this and this was probably all explained at the time. But I would hazard a guess that most people probably didn’t fully understand the process and even if they did, may not have the same view of banks now that they did then.
What to do with your bank Will
The good news is that whilst you are still alive and mentally competent you can do something about this.
You can re-do your Will.
Before you do though, have a careful think about who you would like to be Executors of your Will. Remember this person or people are going to be required to do quite a bit of work initially on your death (the process of probate) and they will be held accountable by their actions.
A lot of people decide to nominate their partners and children. There is nothing wrong with this, providing they are fully aware of what they are doing. The probate process is all fully explained via the government’s website.
At least by choosing family, they are less likely to charge your estate!
It may not be a good idea to choose family or friends if they are very busy, live far away or you don’t trust them.
In these instances it may be more suitable to use the services of a professional Executor. But if you do, please make sure you are fully aware of the fees and ideally make sure the fees are fixed rather than a percentage of your estate.
Be very wary of firms that offer you free Wills as they will usually carry out the same tactics as the banks and insert themselves as Executors.
I am now in the process of re-doing my grandparents Wills and this has taken a lot of the worry away from them. They want to be fully prepared for the eventuality and make things as simple as possible for the family without any third party taking a share of what they leave behind.
Perhaps your Will or your parents’ Will has been done by the bank? If you would like me to review it and let you know where you stand I would be happy to do this at no cost. Please get in touch on 01908 592544 or send me an email firstname.lastname@example.org.
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