Bank Fees Beyond The Grave

It is often said that death and taxes are inevitable and cannot be avoided. It appears that bank fees can be added to the list. At least that would seem to be the case in the UK where Barclays is accused over ‘obscene’ fees for customers’ wills.

An Independent on Sunday inquiry has revealed some major high street banks, solicitors and will-writing firms advise clients to appoint them as executors on customers’ wills and levy fees of up to 4.5 per cent on the estate on death. On an estate worth £500,000, that equates to £22,500 – about four times as much as the fees that the best-buy probate firms charge.

An executor’s role is to administer the deceased’s assets and ensure they are correctly distributed between beneficiaries and the taxman.

Barclays has been criticised for using aggressive tactics to persuade customers to appoint it as executor. Barclays defended its actions, saying that it acted as executor only in a minority of cases and that its policy is to step down when asked to do so by a beneficiary.

Consumers are warned that some will-writing companies and banks insist on writing themselves in as a joint or sole executor in the first draft in the hope of getting the fees for doing the estate work.

A codicil can be added to an existing will to remove unwanted executors. However, it applies only if the person drawing up the will is still alive. As usual, it is buyer beware and you should read very carefully all the small print before signing that draft will. It may have sharp teeth.